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Designing Sustainable Supply Chain Networks
Zhong Hua Zhang
A Thesis
In
The Department
of
Concordia Institute for Information Systems Engineering (CIISE)
Presented in Partial Fulfillment of the Requirements
for the Degree of Master of Applied Science (Quality Systems Engineering) at Concordia
University
Montreal, Quebec, Canada
March 2011
© Zhong Hua Zhang, 2011
CONCORDIA UNIVERSITY
School of Graduate Studies
This is to certify that the thesis prepared
By: Zhong Hua Zhang
Entitled: Designing Sustainable Supply Chain Networks
and submitted in partial fulfillment of the requirements for the degree of
Master of Applied Science (Quality Systems Engineering)
complies with the regulations of the University and meets the accepted standards with
respect to originality and quality.
Signed by the final examining committee: Dr. Jamal Bentahar Chair Dr. Navneet Vidyarthi External Examiner Dr. Simon Li Internal Examiner Dr. Anjali Awasthi Supervisor Approved by Dr. Mourad Debbabi
Chair of Department or Graduate Program Director
20 Dr. Robin Drew
Dean of Faculty
iii
ABSTRACT
Designing Sustainable Supply Chain Networks
Zhong Hua Zhang
Supply chains have grown tremendously in recent years and focusing only on the
economic performance to optimize the costs or return on investments (ROIs) cannot
alone sustain the development of supply chain operations. The impact of different
activities involved in supply chains such as the process of manufacturing, warehousing,
distributing etc. on environment and social life of city residents cannot be ignored.
Correspondingly, the concepts of green supply chain management (GSCM) and
sustainable supply chain management (SSCM) have emerged which emphasize the
importance of implementing environment and social concerns along with economical
factors in supply chain planning. Other perspectives from the management domain insist
that for sustainability, supply chain management should strive for enterprise governance,
business regulations, corporate responsibilities, and social justice.
In this thesis, we study the problem of designing sustainable supply chain networks.
This involves reviewing state-of-the-art concepts for planning sustainable supply chains,
capturing customer and technical requirements using Voice of the Customer (VOC),
investigating the relationship between customer requirements and technical requirements
using Sustainable Function Deployment (SFD) and finally designing sustainable supply
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chain networks by transmitting the weighted technical requirements obtained from SFD
into an integer programming model. AIMMS software is used to implement this model.
The proposed approach is novel and deals with the important problem of designing
supply chain networks to achieve sustainability from socio-economic-environmental
perspective. The strengths and directions for future work are presented using SWOT
analysis.
v
I dedicate this work
to my always loving family,
my patient parents,
my lovely son,
and my devoted wife.
vi
Acknowledgements
The work accomplished in this thesis is accredited to the meticulous instruction,
sincere proposition, and the patient supervision by my thesis supervisor Dr. Anjali
Awasthi. I thank her for steering me through my thesis researches. Her erudite
scholarship and fertile academic thoughts guided me to achieve the knowledge on the
research methodologies used in this thesis. With her suggestions, I have enhanced my
research abilities. I would never forget or undermine the efforts and energy she has
invested in me.
I would also like to acknowledge my friend Beibei. She has helped improve my
English proficiency and corrected the thesis writings. I thank my other friends for helping
me without intending to help; for encouraging me without intending to encourage; for
suggesting me without intending to suggest and for their unconditional support towards
preparation of this thesis.
I would like to thank my always-loving wife. She devotes me constant and
wholehearted support and takes care of our three-year old kid when I am conducting the
research. With her selfless dedication for our family, I could have the time and the energy
to devote myself fully to research activities. Without her consolation on spirit, I would
not sustain the tedious and tough exploration on my thesis work.
vii
Table of Contents
List of Figures .................................................................................................................................. x
List of Tables ................................................................................................................................. xii
List of Acronyms .......................................................................................................................... xiv
Chapter 1 .......................................................................................................................................... 1
Introduction ...................................................................................................................................... 1
1.1 Background ......................................................................................................................... 1
1.1.1 The Supply Chain (SC) ................................................................................................ 1
1.1.2 Supply Chain Management .......................................................................................... 3
1.1.3 Supply Chain Network Design (SCND) ...................................................................... 5
1.2 Motivation ........................................................................................................................... 6
1.3 Contribution ........................................................................................................................ 7
1.4 Research Plan ...................................................................................................................... 7
1.5 Thesis Structure .................................................................................................................. 8
Chapter 2 ........................................................................................................................................ 10
Problem Statement ......................................................................................................................... 10
Chapter 3 ........................................................................................................................................ 11
Solution Approach ......................................................................................................................... 11
Chapter 4 ........................................................................................................................................ 14
Systematic Literature Review ........................................................................................................ 14
4.1 Method Description .......................................................................................................... 14
4.2 Data Collection ................................................................................................................. 15
4.3 Literature Analysis ............................................................................................................ 18
4.3.1 Evolution of Supply Chain Management ................................................................... 18
4.3.1.1 The Horizontal Expansion of Supply Chain Management ...................................... 18
4.3.1.2 The Vertical Expansion of Supply Chain Management .......................................... 20
4.3.2 The Concepts of Sustainable Supply Chain Management ......................................... 21
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4.3.3 Metrics for Assessing Sustainability of Supply Chains ............................................. 23
4.3.3.1 One-dimension Metrics ........................................................................................... 25
4.3.3.2 Two-dimension Metrics .......................................................................................... 27
4.3.3.3 Three-dimension Metrics ........................................................................................ 28
4.3.4 Application Areas ....................................................................................................... 29
4.3.5 Methods for Designing Sustainable Supply Chain Networks .................................... 31
4.3.6 Enablers Vs Barriers to Sustainable Supply Chain Management .............................. 32
4.3.7 State of Sustainable Supply Chain Management in Canada ...................................... 33
Chapter 5 ........................................................................................................................................ 35
Sustainable Function Deployment (SFD) ...................................................................................... 35
5.1 Identifying the Social, Economic and Environmental Factors .......................................... 37
5.2 Voice of Customer (VOC) ................................................................................................ 39
5.2.1 Collecting Customer Requirements ........................................................................... 39
5.2.2 Screening Customer Requirements ............................................................................ 40
5.3 Technical Requirements .................................................................................................... 44
5.3.1 Collecting Technical Requirements ........................................................................... 45
5.3.2 Analyzing Technical Requirements ........................................................................... 48
5.4 Establishing SFD and Evaluating the Weights ................................................................. 51
5.4.1 Relationships between Customer and Technical Requirements ................................. 51
5.4.2 Correlations among Technical Requirements ............................................................ 52
5.4.3 Competitive Assessments ........................................................................................... 53
5.4.4 Weighting Customer and Technical Requirements .................................................... 55
5.5 Contribution of SFD in SSCND........................................................................................ 59
Chapter 6 ........................................................................................................................................ 61
Model Development for SSCND ................................................................................................... 61
6.1 Assumptions ...................................................................................................................... 61
6.2 Mathematical Notations .................................................................................................... 63
6.3 Problem Formulation ........................................................................................................ 67
ix
6.4 Numerical Example .......................................................................................................... 71
6.5 Scenario Analysis .............................................................................................................. 77
6.5.1 Scenario 1 (Change in Weights of Objective Functions) ........................................... 77
6.5.2 Scenario 2 (Change in Supply Capacities and Customer Demands) .......................... 87
6.5.3 Scenario 3 (Change in Size of the Supply Chain Network) ....................................... 92
Chapter 7 ........................................................................................................................................ 94
Conclusions and Future Work ....................................................................................................... 94
7.1 Summary ........................................................................................................................... 94
7.2 SWOT Analysis ................................................................................................................ 95
7.3 The Future Research ......................................................................................................... 96
References ...................................................................................................................................... 98
Appendix A .................................................................................................................................. 109
Appendix B .................................................................................................................................. 111
x
List of Figures
Figure 1.1: Supply Chain Flows ......................................................................................... 2
Figure 1.2: Plan for conducting thesis research .................................................................. 8
Figure 3.1: The 3-step integrated solution approach for SSCND ..................................... 11
Figure 4.1: Distribution of Selected Publications ............................................................. 18
Figure 4.2: The Framework of SSCM .............................................................................. 22
Figure 4.3: The Three Base Line of SSCM ...................................................................... 24
Figure 5.1: Priority Matrix for Analyzing VOCs of SSCM .............................................. 41
Figure 5.2: Cause-and-Effect Analysis for SSCM Technical Factors ............................... 46
Figure 5.3: Screening Technical Requirements for SFD .................................................. 48
Figure 5.4: Relationships between Customer and Technical Requirements ..................... 52
Figure 5.5: Correlation within Technical Requirements ................................................... 53
Figure 5.6: Competitive Assessments of Customer and Technical Requirements ............ 54
Figure 5.7: Priority Analysis for Satisfying Customer Requirements .............................. 56
Figure 5.8: Weights Analysis in SFD ................................................................................ 57
Figure 6.1: A Four-stage Supply Chain ............................................................................. 62
Figure 6.2: Introduction of AIMMS Components ............................................................ 70
Figure 6.3: The Supply Chain Network for Numerical Example ..................................... 72
Figure 6.4: Model results from AIMMS ........................................................................... 74
Figure 6.5: Variable Values for the SSCND Numerical Example ..................................... 75
Figure 6.6: The Topology of SSCN for the Numerical Example ...................................... 76
Figure 6.7: Results of Test 1, Scenario 1 .......................................................................... 78
Figure 6.8: The Topology of SSCN for Test 1, Scenario 1 ............................................... 79
Figure 6.9: Results for Test 2, Scenario 1 ......................................................................... 80
Figure 6.10: The Topology of SSCN for Test 2, Scenario 1 ............................................. 81
Figure 6.11: Results for Test 3, Scenario 1 ....................................................................... 82
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Figure 6.12: The Topology of SSCN for Test 3, Scenario 1 ............................................. 83
Figure 6.13: Results of the SSCND for Test 4, Scenario 1 ............................................... 85
Figure 6.14: The Topology of SSCN for Test 4, Scenario 1 ............................................. 86
Figure 6.15: Outputs for Test 1, Scenario 2 ...................................................................... 88
Figure 6.16: The Topology of SSCN for Test 1, Scenario 2 ............................................. 89
Figure 6.17: Outputs for Test 2, Scenario 2 ...................................................................... 90
Figure 6.18: The Topology of SSCN for Test 2, Scenario 2 ............................................. 91
Figure 7.1: Thesis SWOT Analysis ................................................................................... 95
xii
List of Tables
Table 4.1: Sources for Information Collection on SSCM ................................................. 17
Table 4.2: One-dimension Metrics – Economical Benefits .............................................. 25
Table 4.3: One-dimension Metrics – Environmental Concerns ........................................ 26
Table 4.4: One-dimension Metrics – Social Performance ................................................ 27
Table 4.5: Application Areas in SSCM ............................................................................. 30
Table 4.6: Methods Used in Sustainable SCND ............................................................... 31
Table 4.7: Enablers for Sustainable Supply Chain Management ...................................... 32
Table 4.8: Barriers in Sustainable Supply Chain Management ........................................ 33
Table 5.1: A Strategic Factor Analysis of SSCM .............................................................. 37
Table 5.2: Requirements from Customer and Stakeholder in SCs .................................... 38
Table 5.3: Screened Customer Requirements ................................................................... 42
Table 5.4: Technical Requirements of SSCM Indicated by Respondents ......................... 47
Table 6.1: Data Input for Stage One: Supplier – Manufacturer ........................................ 72
Table 6.2: Data Input for Stage Two: Manufacture – Distributor ..................................... 73
Table 6.3: Data Input for Stage Three: Distributor – Retailer ........................................... 73
Table 6.4: Data Input for Stage Four: Retailer – Customer .............................................. 73
Table 6.5: Facility Capacities and Customer Demands .................................................... 74
Table 6.6: Costs Distribution of SSCND for Numerical Example ................................... 76
Table 6.7: Weights for Scenario Analysis ......................................................................... 77
Table 6.8: Costs Distribution for Test 1, Scenario 1 ......................................................... 79
Table 6.9: Costs Distribution for Test 2, Scenario 1 ......................................................... 81
Table 6.10: Costs Distribution for Test 3, Scenario 1 ....................................................... 83
Table 6.11: Order Allocation and SSCND for Test 2 and Test 3, Scenario 1 .................... 84
Table 6.12: Costs Distribution for Test 4, Scenario 1 ....................................................... 86
Table 6.13: New Capacities for supply chain facilities ..................................................... 87
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Table 6.14: Costs Distribution for Test 1, Scenario 2 ....................................................... 89
Table 6.15: Varying the Demand Data with the Numerical Example to Test the Model .. 90
Table 6.16: Costs Distribution for Test 2, Scenario2 ........................................................ 92
Table 6.17: Model results for Test 1-5, Scenario 3 ........................................................... 92
xiv
List of Acronyms
AHP - Analytical Hierarchy Process
API - Application Program Interface
BSC - Balanced Score Approach
COQ - Cost of Quality
CR - Corporate Responsibility
CSR - Corporate Social Responsibility
DLL - Dynamic Link Library
DP - Dynamic Programming
DS - Decision Support
EDI - Electronic Data Interchange
ERP - Enterprise Resource Planning
GSC - Green Supply Chain
GSCM - Green Supply Chain Management
GUIs - Graphical User Interface
LCA - Life Cycle Analysis
LP - Linear Programming
MIP - Mixed Integer Programming
MIQP - Mixed Integer Quadratic Programming
MRP - Material Requirement Planning
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NLMIP - Nonlinear Mixed Integer Programming
NLP - Nonlinear Programming
QA - Quality Assurance
QC - Quality Control
QFD - Quality Function Deployment
QMS - Quality Management System
RFID - Radio Frequency Identification
ROI - Return on Investment
SC - Supply Chain
SCM - Supply Chain Management
SCN - Supply Chain Network
SCND - Supply Chain Networks Design
SCOR - Supply Chain Operations Reference
SFD - Sustainable Function Deployment
SSC - Sustainable Supply Chain
SSCM - Sustainable Supply Chain Management
SSCN - Sustainable Supply Chain Network
SSCND - Sustainable Supply Chain Networks Design
SWOT - Strengths, Weaknesses, Opportunities, Threats
VOC - Voice of Customer
WEEE - Waste Electrical and Electronic Equipment
1
Chapter 1
1 Introduction
1.1 Background
1.1.1 The Supply Chain (SC)
A supply chain is a network consisting of a chain of activities, facilities, people and
other resources directly or indirectly involved in fulfilling goods to customers. This term
came into prominence when Cooper et al. [1] addressed it as the extension of logistics.
Though there is an ambiguity in definition with the term “logistics” and “supply chain
management” [2], over the past decades, SC has emerged as a more prominent topic.
The supply chain not only contains the material suppliers and manufacturers, but also
distributors, retailers, customers and their associated activities (Figure 1.1) whereas
logistics is limited to only people and activities involved in delivery of goods from
facilities to customers. The SCOR supply-chain operations reference model, developed
by the Supply Chain Council describes a common framework of supply chain [3]. The
SCOR model addresses the activities and operations on both the upstream and
downstream sides.
The main objective of supply chain is to satisfy the customer requirements. As
2
demonstrated in Figure 1.1, the materials and products flow from raw material suppliers
to final customers. This is the so-called supply flow or value flow across downstream
side. In the upstream side [4], the cash flow occurs when corresponding stakeholders of
supply chains exchange their products or services for some form of payment to satisfy
customer needs [5]. The information flow occurs in both directions and is related to
materials, customer demands, facilities, cash etc.
Figure 1.1: Supply Chain Flows
The use of Information technology in development of supply chain operations and
3
efficiency on both supply and demand sides is becoming more important than ever. The
real-time management of information has been possible with the help of high technology,
facilities and methodologies, such as the web-based system, multi-agent, ERP, EDI, RFID
etc, most of which have been used for improving information exchange within different
business entities [6-9].
A better performance of supply chain can be further obtained by cooperation and
collaboration among various supply chain facilities. It will not only improve the supply
flow, value flow, and information flow, but also the demand flow, reused materials
flow, goods for maintenance flow, and the after sales service flow etc. Depending upon
service or production type of supply chains, additional performance requirements can be
integrated.
1.1.2 Supply Chain Management
Supply chain management is a combination of activities, approaches, and knowledge
utilized to efficiently integrate raw material suppliers, manufacturers, distributors,
retailers, and customers, so that merchandise is produced and distributed in right
quantities, to the right locations, and at the right time while minimizing system-wide
costs and satisfying service level requirements [4]. The SCOR model categorizes the
activities of SCM as plan, source, make, deliver, and return [3]. Additionally deriving
from the definition, these activities can be stratified at strategic, tactical, and operational
levels [10]. The different levels of SCM concern the different decision-makings about the
4
source, location, production, inventory, and transportation from a time perspective
(Strategic – Long term, Tactical – Medium term, Operational- Short term). Furthermore,
to reach optimal results, activities such as procurement, capacity planning, technology
adoption, facility operation, production management, schedule planning, material
requirement planning (MRP), distribution planning, inventory management, order
forecasting should also be carefully planned.
Croxton et al. [11] proposed a framework of business processes to achieve high
performance of supply flow, value flow, and the information flow in supply chains. Their
management process framework contains:
1) Customer relationship management
2) Customer service management
3) Demand management
4) Order fulfillment
5) Manufacturing flow management
6) Supplier relationship management
7) Product development and commercialization
8) Returns management
The processes of each facility in the supply chain should be integrated with the
functional activities, such as purchasing, production, logistics, R&D, finance, and
marketing, so as to result in high levels of customer satisfaction, economic returns, low
level of risks and uncertainties in supply chain.
5
1.1.3 Supply Chain Network Design (SCND)
The supply chain network design is a strategic level decision that focuses on
identifying, selecting, and coordinating the activities of key suppliers, manufacturers,
distributors, retailers to meet specific demands from customers so that maximal
profits, minimal costs, and optimal resource allocations can be achieved [4, 12, 13].
According to [14], the ultimate goal of designing supply chain networks (SCN) is to
succeed in achieving maximal profits and minimal costs to satisfy customer demands by
delivering the highest quality product or service order fulfillment.
Different objectives can be considered in designing supply chains. The scale of
supply chain network decides the scope of network design. Design of a local supply chain
network may differ from the global one in which there are reasonably more
considerations, and higher complexity among the operations involved. On the operational
level, the elements of network design usually but not only always consider the location
planning of logistics facilities and customer allocation, supplier selection, smart pricing,
order allocation, strategic sourcing, inventory controlling, distribution scheduling, time
periods for delivering, transit route planning, demands fulfilling, etc [15]. The adoption
of multiple criteria and multiple objectives in designing supply chain networks represents
the system-optimization perspective of SCN integration [16, 17].
The mathematical method has dominated the process of SCND, since they are driven
by the nature of the inputs and the objective of study [13]. Four types of models have
6
been commonly used [18] namely:
1) Linear vs. nonlinear models, in which if the mathematical models exhibit
linearity they are defined as linear models, otherwise considered nonlinear.
2) Deterministic vs. stochastic analytical models, in which if the variables values
are known and specified it is called deterministic. If at least one of the variable
values is unknown, and is assumed to follow a particular probability distribution,
the model is called as stochastic.
3) Static vs. Dynamic models, in which variables of static models do not change
with time, whereas dynamic models consider the change of variables with the
time sequence.
4) Discrete vs. Continuous, in which the state of variables changes in fixed time
intervals in discrete models whereas they change continuously over time in
continuous models.
1.2 Motivation
Globalization has increased the complexity of supply chains with involvement of
more stakeholders, facilities, and technologies. Thereof, many new challenges and
complexities have emerged in supply chain management [19]. The goal of pursuing
minimal operational costs and maximal ROIs in supply chains has been studied over
decades [20]. Efforts to achieve the optimal balance between environment care and
business performance, or the so-called green supply chain management are fairly new
7
and have been studied in [21]. Some researchers with background in public
administration or business management have emphasized on social concerns in SCM [22,
23]. However, studies that endeavor to optimize economic returns, environment concerns,
and the social performance altogether for supply chains are rare. The challenging issues
are how to achieve balance among the business goals, social concerns, and the
environmental impacts of different activities in supply chains. This thesis focuses on the
problem of designing sustainable supply chain networks considering the triple goal of
maximizing economic returns, minimizing environment impacts, and maximizing social
performance for supply chains.
1.3 Contribution
This thesis presents a methodological framework for designing sustainable supply
chains. This involves development of a systematic literature review about SSCM,
extraction of customer and technical requirements using Voice of the Customer (VOC),
investigating relationship between the customer requirements and technical requirements
using Sustainable Function Deployment (SFD) and development of an integer
programming model for sustainable supply chain network design using AIMMS
optimization software [24].
1.4 Research Plan
Figure 1.2 presents the planning steps involved in conducting research for this thesis.
8
The first step involves establishing research goals followed by literature review,
identification of methods and techniques for resolving the problems involved, then
conducting the core research using the identified methods, implementation of methods,
experimentation and scenario analysis and finally delivering the results of the study.
Only when all the designed research objectives and methodologies uniformly succeed in
all steps of the proposed plan for conducting this thesis research, the final outputs will be
delivered.
Figure 1.2: Plan for conducting thesis research
1.5 Thesis Structure
The rest of the thesis is organized as follows. In Chapter 2, we present the problem
statement.
9
Chapter 3 presents our 3-step solution approach for designing sustainable supply
chain networks.
Chapter 4 presents the approaches used for capturing customer and technical
requirements for sustainable supply chain network design. This consists of systematic
literature review and questionnaires development (C-REQ and T-REQ) for listening to
Voice of the Customer (VOC) and identifying customer and technical requirements.
Chapter 5 presents the Sustainable Function Deployment (SFD) approach used for
establishing relationship between customer requirements and technical requirements and
weighting them for designing sustainable supply chains.
Chapter 6 presents the integer programming model used for designing sustainable
supply chain networks.
The conclusions and future work are presented in Chapter 7.
Finally, the references complete the thesis.
10
Chapter 2
2 Problem Statement
The goal of this thesis is to develop a modeling framework for designing sustainable
supply chains considering economic, environmental and social objectives. In order to
achieve this goal, following sub-problems will be investigated in this thesis.
1. Identification of social, economic, and environmental factors for developing
sustainable supply chains.
2. Identification of customer and technical requirements based on social, economic
and environmental factors, investigating their intra- and inter-relationships, and
allocation of priorities (ratings) for developing sustainable supply chains.
3. Designing the sustainable supply chain (SCND model) using the weighted
customer requirements, technical requirements, supply and demand constraints,
and other network modeling parameters.
All the above mentioned sub-problems will be addressed step by step in a sequential
manner to achieve the goal of designing sustainable supply chain networks.
11
Chapter 3
3 Solution Approach
In Chapter 2, we presented the various sub-problems to be resolved in order to
achieve the goal of designing sustainable supply chain networks. Figure 3.1 presents the
three steps involved in the solution approach.
Figure 3.1: The 3-step integrated solution approach for SSCND
In the first step, we identify the economical, environmental, and social factors by
systematic literature review. In the second step, we identify the customer and technical
requirements using Voice of the Customer (VOC), study the relationships, and allocate
weights using Sustainable Function Deployment (SFD). In the third and the last step, we
develop a mathematical programming based model for designing sustainable supply
12
chain network using the weighted technical requirements and network modeling
parameters.
The 3-step integrated solution approach for SSCND is presented in detail as follows:
1. Identification of economic, social and technical factors for developing
sustainable supply chains
To identify the economic, social and technical factors for developing sustainable
supply chains, we conducted a systematic literature review. A systematical literature
review is a method to systematically analyze, categorize, and generalize the concepts
and the tendencies in a specific research area by investigating relevant publications.
It is different from the usual literature review, in which researchers summarize the
existing state of art about a particular research topic. Therefore, the common
literature review is not able to deeply identify and analyze the evolution of research
issues, and is not able to discover the research tendency by investigating the
relationships among the issues/topics concerned by researchers. Hence, in this thesis,
systematical literature review is used to identify the three
socio-economic-environmental factors and all other important parameters involved in
designing sustainable supply chains, their relationships with each other and how it
can be exploited to reach the concept of “sustainability” for supply chain
management. Chapter 4 will presents the results obtained from systematic literature
review in detail.
13
2. Capturing customer and technical requirements and priority (weights) allocation
Capturing customer and technical requirements for developing sustainable
supply chain networks is very important. We developed questionnaire surveys
C-REQ and T-REQ to collect Voice of the Customer (VOC). To capture the technical
requirements, T-REQ (Appendix B) is used whereas to capture the customer
requirements C-REQ (Appendix A) is used. In order to establish the relationship
between the customer requirements and technical requirements and weigh them, we
propose a technique called Sustainable function deployment (SFD) which is based on
the concept of Quality function deployment (QFD). It has been given the name SFD
since it integrates the three metrics for sustainable supply chain management namely
economic, environmental and social views rather than quality management view.
Chapter 5 presents the details of the proposed SFD approach.
3. Designing sustainable supply chain networks
Once the weighted technical requirements have been obtained from SFD, they
are integrated in the objective function of sustainable supply chain network design.
The sustainable supply chain network design problem consists of identifying the best
configuration of supply chain network considering joint optimization of three
sustainability dimensions (social, economic, and environmental) weighted using SFD
subject to capacity constraints of logistics facilities and demand constraints of
customers. An integer programming model is developed in AIMMS for designing
sustainable supply chain networks. Chapter 6 presents details of the proposed model.
14
Chapter 4
4 Systematic Literature Review
4.1 Method Description
A systematic literature review is a method to systematically analyze, categorize, and
generalize the concepts and the tendencies in a specific research area by investigating
relevant publications from wide perspectives, scopes, domains etc. It is used to identify
gaps, issues, and opportunities in a specific research field. The end result of a systematic
literature review is a conceptual model based on existing gaps, available research and
opportunities for future work. Thereof, it helps to identify the contents and guides
towards theory building. It is different from the usual literature review, in which
researchers summarize the existing state of art about a particular research topic. Therefore,
the common literature review is not able to deeply identify and analyze the evolution of
research issues, and is not able to discover the research tendency by investigating
relationships among the issues/topics of concern to researchers. Hence, in this thesis,
systematic literature review is used instead of general literature review.
Meredith [25] illustrated this method in a theoretical way. Easterby-Smith et al. [26]
propose theoretical and practical guidance to do the research with a balance of qualitative
and quantitative methods. Srivastava [27] suggested the following steps in doing
15
literature view : 1) Defining unit of analysis, 2) Classification of context, 3) Material
evaluation, and 4) Collecting publications and delimiting the field. Similarly, Seuring et
al. [28] proposed a closed-loop process for conducting literature review, where the
process includes a feedback loop for the analysis of the collected materials.
The objectives of systematic literature review in our thesis are to investigate what is
a “sustainable supply chain”, how does it differs from the traditional supply chain, its
state of application in industries, metrics that can be used to measure it, potential areas of
application, and the methods that can be used to design sustainable supply chain networks
etc. In order to achieve this objective, we will collect and thoroughly analyze research
materials focusing on:
1) Sustainable supply chain management
2) Supply chain network design
3) Sustainable supply chain network design
4) Supply chain optimization
5) Etc..
At the end, we will evaluate and examine these materials along different structural
dimensions.
4.2 Data Collection
Two resources were used to collect materials for systematic literature review. One
was the hardcopy readings, which means published books, references, magazines etc.
16
Such materials can be acquired in libraries from many academic institutions. The other
was online search in which relevant material was extracted by conducting electronic
search for the research articles by search engines. Following sources were used for
on-line collection of articles:
• www.sciencedirect.com
• www.emeraldinsight.com
• www.springerlink.com
• www.intescience.wiley.com
• www.ebsco.com
• www.metapress.com
• www.subito-doc.de
• www.scopus.com
The major databases used for searching related articles were major publishers such as
Elsevier, Emerald, Springer, and Wiley. Some library services also provide article search
engines, such as Ebsco, Scopus, Metapress, and Subito etc. To increase the reliability of
data collected from the two sources for our thesis research, the databases, journals,
references as well as the individual papers or books were double checked by a second
researcher.
The key words used for searching the resources were “Sustainable Supply Chain”,
“Greening Supply Chain (GSC)”, “Supply Chain Optimization”, “Supply Chain
Networks Design”, “Supply Chain Management”, “Sustainable Supply Chain
17
Management” etc., However, compared to on-line resources, the amount of researched
materials from hardcopy publications was limited.
Table 4.1: Sources for Information Collection on SSCM
Reading Resources Number of Literatures
Business Strategy and the Environment 10
Journal of Cleaner Production 9
Supply Chain Management: An International Journal 5
Journal of Supply Chain Management 2
International Journal of Production Economics 10
International Journal of Production Research 4
Corporate Social Responsibility and Environmental Management 3
International Journal of Logistics Management 3
IEEE Transactions 3
Transportation Research Part E: Logistics and Transportation Review 2
Logistics Information Management 2
International Journal of Operations & Production Management 4
Conference Papers 1
Government Publications 3
Other Journals (one paper from each other journal) 31
Books 14
Online Materials 7
Magazine 1
Graduate Thesis 1
The basic body of literature was identified from 115 publications. Table 4.1 shows
the allocation of the publications along with their relevant sources. The number of total
cited readings from each resource is shown in the second column of Table 4.1. It can be
18
seen in Table 4.1 that the body of literature covers not only specialized supply chain
journals but also general popular management journals. Furthermore, the distribution of
publications for 2005-2010 is provided in Figure 4.1.
27
36
3
11
14
21
17
13
0
5
10
15
20
25
30
Before 2003
2003 2004 2005 2006 2007 2008 2009 2010
Figure 4.1: Distribution of Selected Publications
(2005 – 2010)
4.3 Literature Analysis
4.3.1 Evolution of Supply Chain Management
4.3.1.1 The Horizontal Expansion of Supply Chain Management
In the 1980s, the term “Supply Chain Management” was mentioned by Oliver and
Webber [29] to integrate the critical business process to satisfy the customer demands.
19
Cooper et al. [1], Porter [30], Mentzer et al. [10], and Mouritsen et al. [31] provide a
conceptual framework and operating details for SCM. They emphasize the fact that SCM
has significantly evolved from the “internalization” of processes and activities to the
“externalization” of performance measurement in the field of operations management.
This new trend of SCM has been accelerated mainly by the requirements of information
technology, business collaboration, and the globalization.
Hence, research on SCM has evolved from its core concerns on logistics, operations,
processes, and facilities to the integration of theoretical concepts, strategic planning,
industrial management, cost-based economics efforts, inter-organizational relationships,
intellectual knowledge management and systems scheme. This indicates that the general
scope of SCM has stepped over the boundaries of physical, functional, and legal issues in
companies [16]. The SCM focus is not only on supply-buy activities between some
business entities, but also on management of the chains across organizations, regions,
industries, cultures [32, 33]. Thus, researchers started to work on new areas such as
investigating the influence of environmental practices in supply chain management also
called as greening the supply chain [34-36]. Some others tried to discover how social
factors affect the operations of supply chains, together with economic and environmental
issues. This field of research has come to be known as the sustainable supply chain
management (SSCM) [37, 38]. Although the name GSCM and SSCM are not strictly
coined, the contents of SSCM have horizontally expanded from economic concerns to
environment care, and social activities [39, 40].
20
4.3.1.2 The Vertical Expansion of Supply Chain Management
The previous section discussed the complexity of supply chain networks from the
point of view of horizontal expansion. In this section, we discuss the vertical expansion
of supply chains that amplified further the research scope and the research domains
involved. The vertical expansion involves increase in the number of organizational units
involved at different stages of the supply chain to meet ever growing customer demand.
According to the illustrations of Croom [41]:
…… domain of supply chain management does not concentrate solely on the
single function or firm as the unit of analysis, but takes a broader view across
interacting and interdependent functions, groups and organizations …….
The inclusion of multi-organizations increases the layers of supply chains. Hence,
researchers such as Porter [42] and Feller et al. [5] focused on multi-stage facilities of
supply chains and associated flows. These are the so-called multi-echelon supply chain
networks. Some other researchers investigated how to minimize the influences between
the upper and lower stages [43]; the activities to strengthen information exchange
between upstream and downstream [8]; and the processes to efficiently supply and source
in each facilities [44-46].
21
4.3.2 The Concepts of Sustainable Supply Chain Management
There are many discussions on the definitions of SSCM. Linton et al. [39] reviewed
the definitions of “sustainability” and proposed that the SSCM should satisfy the
relationship, in which
…… anthropology, political science, psychology and sociology interact with the
natural sciences and are interpreted and managed through the development of
policy ……
Piplani et al. [47] proposed the scope of SSCM in terms of economic, non-economic,
environment, especially including social responsibility of supply chains. Other
researchers also illustrated the SSCM from three aspects to achieve the balance among
financial returns, social performance, and environment concerns [28, 48, 49].
In traditional supply chains, the goal is to balance the benefits among multi
stakeholders, improve the operating efficiency throughout the facilities, and maximize the
profitability of processes and activities. However, in sustainable supply chains (SSC)
consideration of environment concerns and social responsibilities along with economic
gains are of top priority.Figure 4.2 presents the conceptual model we developed based on
systematic literature review. It can be seen from Figure 4.2 that the scope of sustainable
supply chain management (SSCM) is no more limited to individual objectives of
22
economic, social or environmental dimension, but towards their integration in all
operations throughout multi-echelon supply chains [17].
Figure 4.2: The Framework of SSCM
Integrated with external factors and internal processes and activities, the operations
of SSCM should focus on the balance among three objectives:
1) Maximal benefits or financial returns
2) Minimal environmental impacts
23
3) Meeting the social requirements
4.3.3 Metrics for Assessing Sustainability of Supply Chains
Metrics are used for evaluating the performance of supply chains. Lapide [50]
proposes five types of metrics namely 1) Function-based, 2) Process-based, 3)
Cross-enterprise, 4) Numerical, and 5) Alignment of executive to management level.
Gunasekarana et al. [51, 52] proposed metrics to evaluate the order planning, supply link,
production level, delivery link, customer service, and logistics cost etc. at strategic,
tactical, and operational levels in traditional supply chains. Brewe [53] suggested an
innovative method to evaluate supply chains using quality-oriented, time-based,
flexibility-oriented, and cost-based measures. Beamon [54] discussed the use of resources,
outputs, and flexibility as the metrics. Shepherd [55] proposed measurements in line
with SCOR model, in which metrics should be established as plan, source, make, deliver,
and return.
24
Figure 4.3: The Three Base Line of SSCM
(Adapted from [56, 57])
According to the descriptions in section 4.3.2, the measurements of SSCM will be
more meaningful if based on the scope of functions, activities, and processes, and the
benefits of stakeholders. Therefore, in this thesis we will measure the “sustainability” of
supply chain at the strategic level. Figure 4.3 presents a multi-dimensional view for
measuring the sustainability of supply chains. Using Figure 4.3, multi-dimension metrics
will be derived from the three base lines (Social, Economic, and Environmental) to
measure the “sustainability” of SCM. The one-dimension metrics are from each one of
three base lines. The two-dimension metrics are the combinations between any two of the
three base lines. They can be used to evaluate the degree of operations, processes, and
activities integration in sustainability in supply chains. The three-dimension metrics also
called as sustainable metrics consider will consider three base lines altogether at a time.
25
4.3.3.1 One-dimension Metrics
One-dimension metric is the first level, in which only one baseline factor is used at a
time to evaluate the performance of SSCM. There are three kinds of one-dimension
metrics:
1) Economic dimension
2) Environmental dimension
3) Social dimension
Table 4.2: One-dimension Metrics – Economical Benefits
Economical Metric Factor Literature
Order planning Order entry, lead time, order patch, cycle time, etc. [51, 52]
Operation/Management Operation on the strategic, tactical, or operational level [51, 52]
Supply link Supplier evaluation, supply capacity, etc. [51, 52]
Production evaluation Scheduling, capacity, quality, techniques, etc. [51, 52, 58]
Delivery performance Flexibility, order fulfillment, least faultiness [51-53, 55]
Costs Logistics, supply, inventory, transaction, etc. [51-54, 59]
ROI Revenue, profits, tax payment [51, 53, 54]
Information sharing Technology, system, equipment, flow, process, etc. [52, 53, 60]
Business co-operation Collaboration, globalization, QMS, work to standards [52, 60-63]
Customer service Process time, query time, [52, 53]
BSC Balanced Score Approach [64, 65]
Table 4.2 presents the indicators for the one-dimension metric based on the
Economic dimension. These indicators apply on the strategic, tactical, and operational
levels and consider function-based, process-based, cost-based, time-based, quality-based,
26
and management-based aspects of supply chain management.
Table 4.3: One-dimension Metrics – Environmental Concerns
Environmental Metric Factor Literature
Waste processing Waste reducing, recycling, reusing [34, 53, 66-68]
Natural resources protect, conserve, utilize, regenerate [40, 58, 62, 66, 68, 69]
Pollution controlling Water, air, transportation pollution [35, 36, 40, 66]
Emission preventing Gas, fluid, chemical, emission trade [35, 36, 66, 70]
Policy Public pressure on environment, [63, 66, 71]
Legislation Act on environment protection [34, 59, 66]
Management/Operation EMS, ISO, LCA, technology, collaborate, monitor [36, 60, 63, 66, 72-76]
Biodiversity Natural species diversity, [60, 62, 69]
Energy saving Save the energy either in natural or renewable [35, 68]
Table 4.3 presents indicators for the one-dimension metric based on Environmental
Dimension. For example, waste processing, natural resources, pollution control etc.
27
Table 4.4 presents the indicators for the one-dimension metric based on the social
dimension. For example, equity, safety, ethics etc.
Table 4.4: One-dimension Metrics – Social Performance
Social Metric Factor Literature
Customer benefits Service level, satisfaction, flexibility, [51, 53-55]
Reputation Quality, CR outcomes, code of conduct, brand name [23, 38, 53, 54, 77-80]
Ethics/Moral For public health, safety, transparency [22, 23, 68, 76-78, 81]
Legislative Act, law, legislation responsibility, [23, 68, 71, 77]
Equity Income, political, economic, social fairness, right [59, 76, 82]
Trust Interpersonal trust, brand trust, [62, 79, 80]
Culture respect Respect culture in local, [62]
Safety Product safety, consumer safety [59, 62, 76]
Public benefits Welfare, training, work condition, quality of life [62, 68, 76, 83]
Social relationship Collaboration, Community, stakeholder [22, 40, 68, 74, 84, 85]
Social standards SA 8000, AA 100, OECD Guidelines etc. [73]
4.3.3.2 Two-dimension Metrics
The two-dimension metrics consider two baseline measures at a time (Figure 4.3).
There are three kinds of two-dimensional metrics namely valuable, equitable, or
reputable (Figure 4.3).
1) The valuable sustainable supply chain management
When supply chains consider both economic benefits and environment concerns, the
performance of SSCM is termed valuable. The factors related with the two-dimension
28
metrics are the combinations of the factors listed in Table 4.2 and Table 4.3. Supply
chains can have specific objectives to attain valuable performance by concentrating on
various combinations of economical and environmental factors. In literature, examples of
valuable SSCM can be found in [53, 58-60, 62, 63].
2) The equitable sustainable supply chain management
The equitable performance involves consideration of environmental and social
baseline factors. To achieve the equitable performance for SSCM, the operations and
managerial activities should focus on integration of different factors listed in Table 4.3
and Table 4.4 respectively. Research on practices of equitable SSCM can be found in
[40, 53, 59, 62, 68, 71, 73, 76].
3) The reputable sustainable supply chain management
The reputable SSCM considers the economical and social baseline factors. To
succeed in reputable performance for a specific SSCM, it is not obligatory to consider all
the factors listed in Table 4.2 and Table 4.4, only certain combinations are enough. In
literature, the examples of reputable SSCM can be found in [51, 53-55, 59, 62].
4.3.3.3 Three-dimension Metrics
The highest level of SSCM performance is said to be “sustainable”, which is
achieved when the three requirements of sustainability, that is, the economical,
environmental, and social performance are achieved at the same time. The different needs
of SSCM decide the specific objectives to be reached for attaining sustainability.
29
Accordingly, all or part of the various indicators or factors listed in Table 4.2, Table 4.3,
and Table 4.4 can be considered for achieving the sustainability objective. Some
examples of sustainable supply chain management can be found in [53, 59, 62, 68, 85].
4.3.4 Application Areas
Table 4.5 presents the various industry/sectors where sustainable supply chain has
been applied.
30
Table 4.5: Application Areas in SSCM
Industry or Sector Application of SSCM Level Ref.
Agriculture/Environment Agriculture materials production
Agriculture fresh product supply
Forest, wood supply
Equitable
Sustainable
Economical
[62]
[40]
[8]
Chemical/Material The rubber and plastics production
Aluminum manufacturing
SSCM of concrete products in construction
Sustainable
Valuable
Sustainable
[85]
[35]
[68]
General Manufacturing Green manufacturing (economical), LCA Valuable [75, 86]
Green manufacturing (social) Equitable [71]
Food/Medical Food production, supply
Food supply, production, and sales
Green purchasing
Social
Equitable
Reputable
[23, 80, 84]
[62]
[77]
Machinery/Equipment Automotive production
Electrical and electronic product LCA
EMS (ISO 14001) in automotive industry
Equitable
Environmental
Environmental
[60]
[34]
[72]
Consuming/Retail Toys production
Package printing
Retail and consumer product goods
Social
Environmental
Valuable
[23]
[36]
[87]
Transportation/Logistics Air transportation
Greening logistics and transportation
Greening supply, source
Valuable
Valuable
Reputable
[70]
[74, 88]
[77]
Electricity/Electronics Telecommunication, electronics production
WEEE SC planning, reverse logistics
Consumer electronics design, production
Social
Valuable
Valuable
[23, 78]
[67]
[45]
Information/Service Design social welfare chain
E-commerce
Green supply and source planning
Social
Economical
Reputable
[83]
[6]
[77]
Apparel/Textile Garments, sportswear, footwear production Social [23, 78]
Fashion retail industry LCA Sustainable [59]
31
4.3.5 Methods for Designing Sustainable Supply Chain Networks
Table 4.6 lists the most commonly used methods for designing sustainable supply
chain networks. This includes mathematical modeling, optimization, empirical analysis
etc.
Table 4.6: Methods Used in Sustainable SCND
Method Description Application Ref.
Mathematical Model Linear programming (LP)
Dynamic programming (DP)
Nonlinear programming (NP)
Mixed Integer Linear Programming
Service chains and food chains
Ecommerce supply, source
Optimize supply and source
Design valuable, reputable SCNs
[83, 89]
[6]
[12]
[90, 91]
Optimization Multi-objective programming
Multi-criteria optimization
System dynamics (SD) methodology
Multi-objective optimization
fuzzy goal programming approach
WEEE SC, valuable SCND
LCA design, equitable SCN
Sustainable SCND
Design a sustainable SCN
Multi-criteria & multi-objective
[67, 92]
[75, 93-95]
[34, 96]
[96, 97]
[98]
Simulation Emission trade scheme influence SCM Transportation [70]
IT Application Information sharing, internet application Material supply [8]
Stochastic Model Stochastic dynamic programming model
Stochastic programming approach
Consumer electronics
Design equitable SCNs
[45]
[99]
Heuristic Model Model energy, cost, allocation with time Aluminum production [35]
SPC Analysis Hypothesis testing, statistic analysis Package printing, sourcing [36, 77]
Empirical Analysis Questionnaire surveying and analysis Manufacturing [71, 72, 86]
Survey, case study Planning, source, supply in retail [59, 78, 87]
Survey, case study Transportation, Logistics [74, 88]
Conceptual Analysis The theoretical analysis for SCND Design a (valuable) green SCN [62, 66]
Case-based for sustainable SCND Planning sustainable SCN [100]
32
4.3.6 Enablers Vs Barriers to Sustainable Supply Chain Management
Table 4.7 presents the enablers for sustainable supply chain management. Many
literatures indicate that internal and external pressures drive the supply chains towards
environmental, social and economical performance. Legislation pressure, market needs,
government pressures, competitive advantages, collaboration requirements etc. are the
main external enablers to practice SSCM. In addition, managerial drivers, costs pressures
etc. are the internal enablers of supply chains.
Table 4.7: Enablers for Sustainable Supply Chain Management
Enabler Literatures Remarks Legislation [28, 67, 71, 101] Legislation from social and environmental concerns
Pressures from stakeholders [23, 63, 71, 74] High performance of SSCM to achieve their benefits
Consumer concern towards SSCM [28, 101, 102] Customer and market pressure for implementing SSCM
Information Sharing [102] Efficient information sharing and communication
Collaborative relationships [28, 102, 103] Supplier integration, reduce risks among supplier-buyer
Government pressures [104] Pressures from government requirements for SSCM
High cost of energy, logistics etc. [86-88] Least costs will reach a part of economical SSCM
Competitive advantage [28, 86-88, 105] A higher competitive has a higher SSCM performance
Desire to be a leader [86-88] Best-in-class, best-in-best is the highest performance
Compliance in product/service [87] Satisfy customer needs, and establish brand reputation
Access to foreign markets [87] Globalization & collaboration reach higher performance
Table 4.8 presents the barriers in sustainable supply chain management. The
performance of SSCM is negatively influence by the presence of barriers, such as high
investments, expenses, requirements of intellectuals, and so on. Some researchers also
emphasize that the limited awareness among the stakeholders of SC also slows down the
33
performance of SSCM.
Table 4.8: Barriers in Sustainable Supply Chain Management
Barriers Literatures Remarks Crisis-oriented management [81] Difficult to reach multi risks control
Cost-oriented management [28, 74, 81, 101] High costs for SSCM in environmental, social, economic efforts
Coordination complexity [28] Difficult to reach results for multi-objective within stakeholders
Supplier obstacle [71, 101] Lack of sustainable suppliers from upstream
Internal obstacle [28, 71, 101, 105] Lack of internal process, regulation, policy etc. to support SSCM
Lack of understanding SSCM [105] Lack of how to incorporate SSCM among stakeholders
Lack expertise [23] No enough expertise to support SSCM in wide scope operations
Lack budget [23] Limited budgets for SMEs
Outdated technology [23] Lack of innovations, state-of-the-art technologies
Limited awareness [23, 74, 105] Difficult to reach the accordance of SSCM in management
4.3.7 State of Sustainable Supply Chain Management in Canada
Due to the predominance of forest and wood industry in Canada, researchers are
focusing on reducing the bullwhip effects in wood supply chains to attain economical
benefits. An example is the Quebec Wood Supply Game [8]. However, this application is
only able to achieve the economical performance but not the environmental and social
performance in supply chains.
For green supply chain management, economical and environmental performance for
equitable level is discussed in [36]. In addition, researchers investigated the practice of
implementing SSCM on waste electrical and electronic equipment (WEEE) industry in
[67]. The deliverable is a model that addresses the legislation, environment concerns, and
34
the economical objectives. In 2009, Industry Canada proposed a series of publications
[86-88] that report the practice of GSCM in manufacturing, retail, and
logistics/transportation industry. These publications present the current situation,
practices, and drivers for sustainable supply chain management in both manufacturing
and service sectors.
35
Chapter 5
5 Sustainable Function Deployment (SFD)
In this chapter, we propose a technique called Sustainable Function Deployment
(SFD) developed on the concept of Quality Function Deployment (QFD) to establish the
relationship between customer and technical requirements and prioritize them for
developing sustainable supply chains. The quality function deployment (QFD) approach,
also called the House of Quality, developed by Dr. Yoji Akao [106] is used to listen and
integrate the voice of customer (VOC) with the designed features of products or services.
Implementation of QFD requires eight steps [107] which are described as follows:
1) Develop a list of customer requirements collected from both internal and
external customers for designing quality goals.
2) Develop a list of technical requirements to design elements or features for
quality.
3) Demonstrate the relationships between the customer requirements and technical
requirements.
4) Identify the inter- and intra-relationships among the technical and customer
requirements within technical requirements itself for developing the roof in the
QFD house.
36
5) Perform a competitive assessment of the customer requirements and technical
requirements.
6) Prioritize customer requirements considering their importance, target value,
effect on sales, and generate absolute weight.
7) Prioritize technical requirements based on the degree of difficulty, target value,
and calculate absolute weights, and relative weights.
8) Analysis of absolute and relative weights to determine quality goals or features
based on the design inputs from customer needs.
The customer requirements for SFD are obtained through questionnaire surveys
(Voice of the Customer) and technical requirements are obtained from systematic
literature review. In addition, priority matrix and cause-and-effect diagram techniques are
applied to screen the customer and technical requirements for designing sustainable
supply chains. The weighting of customer and technical requirements is another purpose
of developing these techniques.
In order to reach a sustainable performance, researchers should not only focus on
improving economical benefits, but also satisfying environmental and social requirements.
The current situation of research on SSCM focuses more on the one-dimension and
two-dimension level. However, to reach “sustainable” SCM on the three-dimension level
is worthy of exploring and is the focus of our research in this thesis.
37
5.1 Identifying the Social, Economic and Environmental Factors
Before developing the SFD, we identify the social, economic, and environmental
factors required to develop a basic understanding of sustainable supply chains. This will
be achieved in two tasks. The first task intends to identify, analyze, and generalize the
factors, which will influence the performance of SSCM. The second task performs an
analysis of SSCM requirements, which decide the direction of improving SSCM
performance.
Table 5.1: A Strategic Factor Analysis of SSCM
Economical Factor Environmental Factor Social Factor
Cost and expense Environment operation Customer satisfaction
Business profit Natural resource protection Stakeholder satisfaction
Technology Application Resource utilization and regeneration Social equity
Business expansion Waste recycling Public benefits
Enterprise globalization Emission control Business trust and reputation
Process collaboration Pollution elimination and prevention Legal compliance and ethics
Business operation Environment policy and legislation Culture protection
In section 4.3.3, we presented the metrics for assessing the performance of
sustainable supply chains (Table 4.2, Table 4.3, and Table 4.4). In those selected readings,
researchers emphasized that the degree of improving the performance of those
metrics/factors will positively influence the performance of SCM. Although different
levels of SSCM performance can be achieved, the sustainable one should involve the
38
crucial factors for improving economical benefits, environmental concerns, and social
performance. Table 5.1 summarizes the factors on the strategic level.
In order to improve the overall performance of sustainable supply chains, customers
and stakeholders’ requirements should also be taken into account besides considering
technical factors. Using the analysis of enablers and barriers of SSCM in section 4.3.6,
we identified the customer requirements and stakeholder requirements. Table 5.2
categorizes these requirements from both the internal, external customer and stakeholder
point of view for supply chains.
Table 5.2: Requirements from Customer and Stakeholder in SCs
Internal Customer External Customer Internal Stakeholder External Stakeholder
High employee benefits Consumer safety Competitive advantage Best returns on investing
Efficient communication Consumer health Good to be a leader Good in public benefits
Effective work processes Compliance in product Good for globalization Legislation compliance
Human rights protection Best in service Good for collaboration Good in public safety
Least work pressures Least costs on product Least operation costs Good for public health
Safe in work environment Good for social diversity
The strategic factors (Table 5.1) integrated with the customer requirements (Table 5.2)
provide the basic infrastructure for developing SFD.
39
5.2 Voice of Customer (VOC)
Voice of customer is a technique used for collecting customer requirements through
questionnaires, personal interviews, field studies etc. In the thesis, we will use VOC to
collect the customer preferences and requirements for designing sustainable supply chain
networks. Thereafter, the collected preferences will be screened by the degree of benefits
to be achieved in terms of the efforts to be devoted.
5.2.1 Collecting Customer Requirements
Design of sustainable supply chain networks is highly dependent on the customer
requirements whose satisfaction degree decides the level of performance achieved in
SSCM. There are several ways to collect the VOC [108-110], however, in this research,
questionnaire survey study with the employees in all stages of the supply chain is
suggested. We designed a questionnaire (C-REQ) based on the outputs of systematic
literature review in section 4.3. The details of the questionnaire survey can be found in
Appendix A. To design the questions in our survey, we used the factors summarized in
Table 5.2. A total of twelve questionnaires were distributed, and responses were received
for all of them (five students, two faculty members, and other five full time employees
working for different companies in the field of supply chains).
40
5.2.2 Screening Customer Requirements
After obtaining customer requirements from the VOC, the next issue is how to
process them. Are all VOCs able to be satisfied [111]? Are there any risks in fulfilling the
VOC [112]? Schwalbe [113] suggested a risk management method to fulfill the customer
requirements. In addition, is there any pre-defined sequence to implement the VOCs
[114]?
In this thesis, based on the requirements from customers and stakeholders of
sustainable supply chains, a priority matrix (Figure 5.1) is developed in terms of the
potential benefits to achieve and the efforts to be devoted for planning sustainable supply
chains. In Figure 5.1, the VOC is defined as the combination of customer demands and
the requirements from stakeholders in SSCM. The priority matrix indicates the
relationship between the efforts to invest on satisfying VOCs and the benefits achieved
by those practices. Consequently, the data collected from questionnaires is represented on
Figure 5.1 in terms of final scores where each final score for the impact and effort is the
average of the feedbacks from the respondents.
41
Figure 5.1: Priority Matrix for Analyzing VOCs of SSCM
The customer requirements with high priority levels (in terms of impact) in Figure
5.1 are listed in Table 5.3.
42
Table 5.3: Screened Customer Requirements
Screened Customer Requirements Impact Level Effort Level
Efficient communication within facilities in supply chains 9.7 1.4
Effective work processes within facilities in supply chains 9.8 2.2
Employee rights protection throughout the supply chains 8.9 2.3
Protect the safety while employees are working 6.5 1.2
Assure consumer safety while they consume products/services 8.3 1.4
Protect consumer health while they consume products/services 8.4 2.4
Provide the compliance in products/services as claimed 8.6 1.3
Minimize the cost of clients consuming products/services 6.8 2.4
Minimize managerial or operations costs throughout supply chains 9.5 2.9
Comply with the legislations on economic, environment, and society 9.6 2.6
Ideally all the VOCs are important to improve the performance of SSCM, though
practically it is difficult to adopt all of them together or implement them in one-step. In
Table 5.3, we choose those customer requirements that are located within “Do it now”
area, where the impact level is from 5.0 to 10.0 and the effort level is from 1.0 to 5.0.
After screening the VOCs from the matrix in Table 5.3, the following customer
requirements are the first ones to be satisfied:
1) Efficient communication within facilities in supply chains
This category of customer requirements concentrates on improving the
performance of information sharing, data exchange, communication technology
application, business collaboration, equipment or system innovation etc.
2) Effective work processes within facilities in supply chains
This requirement includes implementing standards for work, improving product
43
and/or service quality, order fulfillment rate, handling product returns, business
process management, supply management, source management, after sales
service, risk management in processes etc.
3) Employee rights protection throughout the supply chains
This requirement includes customer concerns such as human rights, work rights,
right to quality for life, training, welfares, employee benefits etc.
4) Protect the safety while employees are working
This requirement includes safety concerns for employees during work such as
good working environment, safety control during working etc.
5) Assure consumer safety while they consume products/services
This requirement includes safety concerns for customers during consumption of
products or services, that is, they should not be dangerous or explosive and
should satisfy the consumers’ safety requirements.
6) Protect consumer health while they consume products/services
This requirement includes consumer health protection which means the products
or services should be harmless to consumers upon consumption for example
avoiding the use of lead in child toys etc.
7) Provide the compliance in products/services as claimed
Customers expect that the products or services have consistent function,
characters, price etc. as the companies advertise or claim, therefore, the products
or services should not be changed without official declaration.
44
8) Minimize the cost of clients for consuming products/services
Clients always welcome lower costs for spending on products or services with
the same function or characteristics. They sometimes even expect more functions
and characters within the same price if there are competitions in the market.
9) Minimize managerial or operational costs throughout supply chains
The internal customers of a supply chain, especially managers, are always
making efforts to reduce costs and expenses through all processes and operations
of supply chains. External customers such as buyers of products or services also
prefer products or services with reduced costs or expenses.
10) Comply with the legislations on economic, environment, and society
The clients who consume the products or services expect the processes of
production, services to be legal in terms of following economic regulations,
environment legislations, social acts etc. Other customers, such as government
(who is the customer of social activities or organizational activities) also expect
all activities to be legal.
5.3 Technical Requirements
This part of research will collect the technical requirements by conducting
questionnaire surveys (Appendix B) with people at managerial, technical and supervisory
levels in supply chain. The collected technical requirements will then be analyzed to
identify areas for improving the performance of sustainable supply chains.
45
5.3.1 Collecting Technical Requirements
In order to collect technical requirements, we developed a questionnaire survey
(T-REQ) based on the concept of SERVQUAL [107]. SERVQUAL has been used in
many situations, especially in service quality assessment.
Based on the technical factors summarized in Table 5.1, T-REQ (Appendix B) was
designed for surveying managerial and professional people in the supply chain and
collecting their thoughts on what technical factors should be considered in improving the
performance of SSCM, investigating their relationships with each other and with
customer requirements.
Figure 5.2 illustrates a cause-and-effect diagram developed through brainstorming to
analyze all the technical requirements for improving the performance of SSCM. It can be
seen in Figure 5.2 that there are three main factors namely the economical factors, the
environmental factors, and the social factors. Besides, certain uncertainties may also exist
in sustainable supply chains.
Using the results of the cause-and-effect diagram and the questionnaire survey, we
acquired information on technical requirements that are most important in SSCM, the
ones to be implemented, relationship between them, their competitive level with respect
to traditional supply chains etc.
46
Figure 5.2: Cause-and-Effect Analysis for SSCM Technical Factors
Although there exist different technical requirements for different stages in supply
chains, in our research we will concentrate on the general technical requirements for
SSCND. That is, strategic planning of SSCND is the main objective rather than solving
an operational SSCND problem. Hence, the data are representatively collected from the
professionals researching and instructing in the areas of SCM, instead of surveying from
a group of managerial people in a supply chain. Four out of four respondents have
indicated their feedbacks in surveys. The data collected is shown in Table 5.4.
47
Table 5.4: Technical Requirements of SSCM Indicated by Respondents
Technical Requirements EXP. PER.
Economical Factors
E1: Costs and expenses control 8.25 7.50
E2: Reach the high business profitability 9.00 8.50
E3: Widely apply new technology and integrated systems 7.25 6.00
E4: Efficient business process management, activity operations 8.75 6.50
E5: Apply the optimization techniques or methodologies in SCs 6.75 4.50
E6: Collaborative operations among facilities in SCs 8.50 9.50
Environmental Factors
N1: Good environment operation, such as pollution and waste prevention 9.25 7.25
N2: High efforts in utilizing natural resources, such as mining, exploring 8.25 2.00
N3: High efforts in conserving natural resources 7.25 1.75
N4: High efforts of natural resource regeneration, such as reuse 9.25 1.00
N5: Effective energy utilization, such as fossil energy, bio energy 8.25 0.75
N6: High efforts of planning and conducting environment policy 4.75 4.25
N7: High compliance in environment legislations 3.75 9.00
Social Factors
S1: High satisfaction of customers and business partners in SCs 7.75 8.00
S2: High efforts to manage business trust and reputation, as product compliance 7.75 9.00
S3: High efforts in the social equity, such as salary, work load 8.00 4.00
S4: High efforts in public benefits, such as provide training, welfare 8.50 4.25
S5: High efforts in culture protection, such as respect personal culture habits 2.75 8.00
S6: High efforts in business ethics and moral attempts 4.50 7.00
Uncertainty Factors
U1: Natural environment decides the performance of SSCM 0.50 6.00
U2: The politics satisfaction decides the performance of SSCM 2.25 1.50
U3: The religion situation decides the performance of SSCM 0.25 1.00
48
5.3.2 Analyzing Technical Requirements
The data collected from the questionnaire survey T-REQ is shown in Table 5.4. The
index “EXP.” means the “Expectation” level, or the expected degree of performance of
the relevant technical factor for SSCM. Similarly, the index “PER.” means the
“Perception” level, or the perceived degree of performance with respect to the chosen
technical factor for SSCM. Each number for “EXP.” and “PER.” in Table 5.4 is the
average of total scores by the evaluations from four respondents for the different
questions of T-REQ survey (Appendix B).
Figure 5.3: Screening Technical Requirements for SFD
49
Figure 5.3 presents a graphical illustration of the technical factors data obtained from
Table 5.4. All the technical factors with “EXP.” levels higher than the average level (EXP
= 5) are considered important and used in SFD for designing sustainable supply chain
networks. The details of these factors are presented as follows:
1) Cost control
This design attribute includes E1 and E2. That is, the cost factor is one of crucial
elements that affect the performance of SSCM. The costs refer to operational
costs, product costs, managerial expenses, tax, and so on. Hence, “Cost control”
is a general indicator for all the cost-based technical requirements.
2) New technology application and innovation
This factor derived from E3, which means new technology is one of crucial
factors to improve the performance of SSCM such as ERP system, EMS system,
RFID, OA, and so on.
3) Operation processes and procedures optimization
This category generalizes E4, E5, and E6. It emphasizes that the methodologies,
techniques, new knowledge of SC operations will highly impact the performance
of SSCM. Furthermore, collaboration will become more and more important for
SSCM.
4) Environmental operations
Environmental operations indicate the technical requirement N1. This factor
denotes that effectively managing the activities and processes, such as pollution
50
prevention, emission control, waste recycling etc. will positively impact the
performance of SSCM.
5) Natural resource utilization, regeneration, and reservation
This factor contains N2, N3, and N4. There are many topics in this category,
such as natural resource exploration, mining, recycling bio species conservation,
and so on. Effective and efficient implementation of these factors will positively
affect the performance of SSCM.
6) Energy utilization and regeneration
This technical requirement about energy utilization and regeneration indicates
N5, which includes how to improve the efficiency of energy utilization, how to
achieve energy regeneration, how to save the energy, etc.
7) Improve service level for customers and business partners
This technical factor implies the matters of S1 namely improving the customer
service level and the satisfactions of stakeholders in SC such as reducing the
order processing and delivery time, reducing the risks from suppliers and so on.
8) Improve business trust and reputation operations
This factor, namely, S2 is concentrating on improving business trust,
interpersonal trust, product brand reputation etc to improve the performance of
SSCM. This can be achieved through methods or techniques such as quality in
product design, compliance in product and services, best-in-class program,
best-in-best program, and so on.
51
9) Efforts for improving public benefits and social equity
This factor includes S3 and S4, in which public safety, public health, training,
social rights, economic equity, quality of life etc are emphasized for improving
the performance of SSCM.
5.4 Establishing SFD and Evaluating the Weights
This section will establish the SFD. Based on the results of surveys C-REQ and
T-REQ, the SFD will integrate the customer requirements with technical requirements to
show their relationships and generate weights or ratings for each of them.
5.4.1 Relationships between Customer and Technical Requirements
Figure 5.4 shows the customer and technical requirements obtained from sections 5.1
and 5.2. The interrelationships between them are presented on a 3-level scale in the center
matrix enclosed between the customer and technical requirements. The number 9
represents high level of correlation, 3 medium, and 1 means a low level of correlation.
Responses from four professional respondents were used to obtain the relationships
between customer requirements and technical requirements.
52
Figure 5.4: Relationships between Customer and Technical Requirements
5.4.2 Correlations among Technical Requirements
The responses from the questionnaire T-REQ (Appendix B) provided the
intercorrelations between the technical requirements presented in the roof of Figure 5.5. A
six level scale (+9 (Strong positive), +5 (Positive), +1 (Weak positive), -1 (Weak
Negative), -5(Negative), -9 (Strong Negative)) was used.
53
Figure 5.5: Correlation within Technical Requirements
5.4.3 Competitive Assessments
The competitive assessment for four types of supply chains namely Sustainable,
Equitable, Reputable, Valuable (Chapter 4) was done from both customer requirements
and technical requirements perspective. It can be seen in Figure 5.6 that based on the
competitive assessments, sustainable supply chain management has overall higher
performance than reputable, equitable, and valuable supply chains. The reason is that
54
SSCM considers not only one aspect to improve such as reaching economic benefits,
satisfying environmental concerns, or fulfilling social performance, but all of them
together to optimize the total performance of supply chain. Other types of supply chains
only achieve partial successes when compared with SSCM on these three dimensions.
Figure 5.6: Competitive Assessments of Customer and Technical Requirements
55
In Figure 5.6, for the same customer requirements and technical requirements in a
supply chain, the competitive assessments show that the sustainable supply chain
management has higher total performance than reputable supply chain management,
equitable supply chain management, and valuable supply chain management. The reason
is that SSCM considers not only one aspect to improve economic benefits, satisfy
environmental concerns, or fulfill social performance, but integrates all three factors
together to optimize the total performance of supply chains. Thus, other types of supply
chains only achieve partial successes when compared with SSCM.
5.4.4 Weighting Customer and Technical Requirements
Figure 5.1 showed the priority allocations for customer requirements in terms of
impacts and efforts. To establish their weights in SFD, we developed a priority analysis
matrix (Figure 5.7). It can be seen in Figure 5.7 that the impacts (Y-axis) and efforts
(X-axis) are categorized into five-levels. To obtain the priority numbers, we divide the
“Do it now” area into nine partitions, in which the priority level ranges from the highest
(No. nine) to the lowest (No. one). After this standardization, the customer requirements
are represented on the priority analysis matrix on a scale of 1-9. The customer
requirements located in the “Do it now” area are high priority requirements.
56
Figure 5.7: Priority Analysis for Satisfying Customer Requirements
In Figure 5.8, the SFD table integrates all the numerical relationships between the
customer and technical requirements. The priority level in the SFD table for customer
requirements is based on the priority ratings by customer (Figure 5.7). Using these
numerical values, we generate priority weights for customer and technical requirements.
57
Three key points that should be considered in performing these calculations are:
Eff
ort L
evel
Prio
rity
Lev
elA
bsol
ute
Wei
ght
Impa
ct L
evel
Absolute WeightAbsolute FactorRelative WeightRelative Factor
Tec
hnic
al R
equi
rem
ents
Cus
tom
er R
equi
rem
ents
Com
petit
ive
Ass
essm
ent
Competitive Assessment
Cos
t con
trol
New
tech
nolo
gy a
pplic
atio
n an
d in
nova
tion
Ope
ratio
n pr
oces
ses a
nd p
roce
dure
s opt
imiz
atio
n
Envi
ronm
ent f
rien
dly
oper
atio
ns
Nat
ural
reso
urce
util
izat
ion,
rege
nera
tion,
and
rese
rvat
ion
Ener
gy u
tiliz
atio
n an
d re
gene
ratio
n
Impr
ove s
ervi
ce le
vel f
orcu
stom
ers a
nd b
usin
ess p
artn
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Impr
ove b
usin
ess t
rust
and
repu
tatio
n op
erat
ions
Effo
rts f
or im
prov
ing
publ
ic b
enef
its a
nd so
cial
equi
ty
Comply with legislations on economic, environment, and society
Efficient communication within facilities in supply chains
Effective work processes within facilities in supply chains
Employee rights protection throughout the supply chains
Protect the safety while employees are working
Assure consumer safety while they consume products/services
Protect consumer health while they consume products/services
Provide the compliance in products/services as claimed
Minimal cost of clients consuming products/services
Minimal managerial or operation costs throughout supply chains
Computing Absolute Weight:
Computing Absolute Weight:
Computing Relative Weight:
Sums1366
26156
Intercorrelations
Symbols
S = Sustainable supply chain managementR = Reputable supply chain managementE = Equitable supply chain managementV = Valuable supply chain management
Economic Environment Social
Figure 5.8: Weights Analysis in SFD
58
1) Calculation of absolute weights for customer requirements.
This takes into account the impact level, effort level and priority level for each
customer requirement. To fulfill a customer requirement, it should have a higher
priority level and a lower effort level. The priority sequence of actions to fulfill
customer requirements is in terms of their absolute weights from a higher level
to the lower level. These absolute weights have considered the priorities of
impacts and efforts. Therefore, to calculate the absolute weight of each customer
requirement, we propose the highest effort level (five) minus its current effort
level. This method will obviously magnify the values and differentiate priorities
for satisfying customer requirements.
2) Calculation of absolute weights of technical requirements.
This is based on the relationships of technical requirements with customer
requirements and the impact levels of customer requirements. A technical
requirement with a higher score of absolute weight has higher priority to be
adopted as a key factor for improving the performance of SSCM. However, the
absolute weights partially demonstrate the importance degrees of technical
requirements to the performance of SSCM since only impact levels of customer
requirements are used.
3) Calculation of relative weight of technical requirements.
This considers the priority levels of customer requirements and the numerical
relationships between technical requirements and customer requirements in
59
calculations. The relative weights constructively indicate the priority sequence to
adopt technical factors to improve the performance of SSCM.
It can be seen from the results of Figure 5.8 that the relative weights of economic
factors is 0.493, 0.118 for environmental factors, and 0.388 for social factors. That means,
based on the results of our surveys, economic factor is more important followed by social
and environmental categories. Please note our goal in this section is to demonstrate the
utility of SFD in weighting customer and technical requirements. The results obtained
from SFD are highly dependent on the ratings provided in C-REQ and T-REQ, therefore,
the selection of number of respondents, their familiarity with the subject and experience
with SSCM should be carefully evaluated before launching the questionnaire surveys.
5.5 Contribution of SFD in SSCND
The sustainable supply chain network design is a strategic decision that integrates the
objectives of economic benefits, environment concerns, and social requirements to
achieve sustainable performance in processes, activities, and operations throughout the
supply chain. Using the SFD analysis, we were able to integrate the Economical,
Environmental and Social dimensions altogether. Variables addressing these dimensions
from customer requirements and technical requirements point of view were studied in
detail. Their interrelationships were analyzed to finally generate priority scores for both
customer (absolute requirements) and technical requirements (relative weights) which
will be used in prioritizing different objectives in the mathematical programming model
60
for designing sustainable supply chain network in the next stage of our thesis.
61
Chapter 6
6 Model Development for SSCND
6.1 Assumptions
Based on the framework described in section 5.5, three main factors are considered
in SSCND namely “economical benefits”, “environmental concerns”, and “social needs”.
Each of these factors has different weights. We will mathematically represent these
factors in terms of costs namely social, economic and environmental costs for different
stages of the supply chain. Before developing the mathematical model, following
assumptions are used:
1. The supply involves four stages (Figure 6.1).
1) Stage one: Supplier – Manufacturer
2) Stage two: Manufacturer – Distributor or Wholesaler
3) Stage three: Distributor – Retailer
4) Stage four: Retailer – Customer
The facilities involved in the different stages of the supply chain are manufacturing
units, warehouses, distribution platforms, retail stores etc.
62
Figure 6.1: A Four-stage Supply Chain
2. All the facilities at different stages of the supply chain (Figure 6.1) are
interconnected to each other. For example, each supplier is connected to all the
manufacturing units and vice versa. This implies that the raw material can be
procured from any of the suppliers for any manufacturer (subject to capacity and
demand restrictions); all manufacturers are eligible to supply semi-finished products
to distributors or wholesaler; all distributors for finished products supply to any of
the retailers; and finally all retailers can supply package products to customers.
3. It is possible to have different weights for economical, environmental and social
costs at different stages in supply chains. In Chapter 5, we showed different weights
0.493:0.118:0.388 for economical benefits, environmental concerns, and social needs.
This ratio was derived from the results of surveying the customers and managerial
63
people throughout the supply chains. In this thesis, the modeler assumes that the
ratios are the same for different stages of the supply chains. However, specific
managerial requirements may require usage of different ratios for different stages of
supply chain.
4. In our model, the Bill of Material involves the usage of 1:1 ratio of products at any
stage until final delivery to customer. This implies one unit of finished product
involves usage of one unit and one kind of semi-finished materials that again requires
usage of one type of raw material only. In reality, several raw materials may be
required to achieve at a finished product, however, we have kept the 1:1 product
usage ratio to avoid computational complexity arising from complex BOM in our
model that already is computationally challenging considering the three objectives
and size of the supply chain network.
6.2 Mathematical Notations
Sets
S - Set of raw material suppliers
M - Set of manufacturers
D - Set of distributors
R - Set of retailers
C - Set of customers
64
Parameters
• Number of suppliers to be selected
Ns= Total number of raw material suppliers
Nm= Total number of manufacturers
Nd = Total number of distributors
Nr = Total number of retailers
• Weights of the three objectives
ecw = Weight of economical costs
enw = Weight of environmental costs
sow = Weight of social costs
• Facility opening costs
siCl = Facility opening cost for the raw material supplier i ; Si ∈
mjCl = Facility opening cost for the manufacturer j ; Mj ∈
dkCl = Facility opening cost for the distributor k ; Dk ∈
rlCl = Facility opening cost for the retailer l ; Rl ∈
• Transportation costs
sm
ijCt , = Transportation cost per unit to supply materials from raw material
supplier i to manufacturer j ; MjSi ∈∈ ,
md
jkCt , = Transportation cost per unit to supply semi-finished products from
manufacturer j to distributor k ; DkMj ∈∈ ,
65
dr
klCt , = Transportation cost per unit to supply finished products from
distributor k to retailer l ; DkRl ∈∈ ,
rc
lnCt , = Transportation cost per unit to supply assembled products from
retailer l to customer n ; RlCn ∈∈ ,
• Environmental costs
sm
ijCe , = Environmental cost per unit to supply materials from raw material
supplier i to manufacturer j ; MjSi ∈∈ ,
md
jkCe , = Environmental cost per unit to supply semi-finished products from
manufacturer j to distributor k ; DkMj ∈∈ ,
dr
klCe , = Environmental cost per unit to supply finished products from
distributor k to retailer l ; DkRl ∈∈ ,
rc
lnCe , = Environmental cost per unit to supply assembled products from retailer
l to customer n ; RlCn ∈∈ ,
• Social costs
sm
ijCs , = Social cost per unit to supply materials from raw material
supplier i to manufacturer j ; MjSi ∈∈ ,
md
jkCs , = Social cost per unit to supply semi-finished products from
manufacturer j to distributor k ; DkMj ∈∈ ,
dr
klCs , = Social cost per unit to supply finished products from
distributor k to retailer l ; DkRl ∈∈ ,
66
rc
lnCs , = Social cost per unit to supply assembled products from retailer l to
customer n ; RlCn ∈∈ ,
• Supply capacities
iCps = Raw material supply capacity of supplier i ; Si ∈
jCpm = Semi-finished product supply capacity of manufacturer j ; Mj ∈
kCpd = Finished product supply capacity of distributor k ; Dk ∈
lCpr = Assembled product supply capacity of retailer l ; Rl ∈
• Demands from customers
nDem = Finished product demands from the customer n ; Cn ∈
Decision Variables
• Supplier selection (Assuming supplier is different for each stage)
six = Decision variable to select the raw material supplier i if 1=s
ix ,
else 0; Si ∈
mjx = Decision variable to select the manufacturer j if 1=m
jx , else 0;
Mj ∈
dkx = Decision variable to select the distributor k if 1=d
kx , else 0; Dk ∈
rlx = Decision variable to select the whole seller/retailer l if 1=r
lx , else 0;
Rl ∈
• Order quantity allocation
67
smijq , = Order quantity of raw materials shipped from raw supplier i to
manufacturer j ; MjSi ∈∈ ,
mdjkq , = Order quantity of semi-finished product shipped from manufacturer j
to distributor k ; DkMj ∈∈ ,
drklq , = Order quantity of finished product shipped from distributor k to
retailer l ; RlDk ∈∈ ,
rclnq , = Order quantity of assembled product shipped from retailer l to
customer n ; CnRl ∈∈ ,
6.3 Problem Formulation
Our mathematical model for sustainable supply chain network design minimizes the
facility selection costs, transportation costs, environmental costs, and social costs, and
performs order quantity allocations for facilities at different stages of the supply chain
considering the demand and capacity constraints. The mathematical description of the
problem is presented as follows:
68
Minimize CostsSocialCoststalEnvironmenCostsEconomicalz ++= (6.1)
⎟⎟⎠
⎞⎜⎜⎝
⎛+++= ∑∑∑∑
∈∈∈∈ Rl
rl
rl
Dk
dk
dk
Mj
mj
mj
Si
si
si
ec ClxClxClxClxw
⎟⎟⎠
⎞⎜⎜⎝
⎛++++ ∑ ∑∑∑∑∑ ∑∑
∈ ∈ ∈∈ ∈∈ ∈∈Mj Cn Rl
drln
rcln
Rl Dk
drkl
drkl
Dk Mj
mdjk
mdjk
Si
smij
smij
ec CtqCtqCtqCtqw ,,,,,,,,
⎟⎟⎠
⎞⎜⎜⎝
⎛++++ ∑ ∑∑∑∑∑ ∑∑
∈ ∈ ∈∈ ∈∈ ∈∈Mj Cn Rl
rcln
rcln
Rl Dk
drkl
drkl
Dk Mj
mdjk
mdjk
Si
smij
smij
en CeqCeqCeqCeqw ,,,,,,,,
⎟⎟⎠
⎞⎜⎜⎝
⎛++++ ∑ ∑∑∑∑∑ ∑∑
∈ ∈ ∈∈ ∈∈ ∈∈Mj Cn Rl
mdln
rcln
Rl Dk
mdkl
drkl
Dk Mj
mdjk
mdjk
Si
smij
smij
so CsqCsqCsqCsqw ,,,,,,,,
Subject to
iCpsxq i
si
Mj
smij ∀≤∑
∈
,, (6.2)
jCpmxq jmj
Dk
mdjk ∀≤∑
∈
,, (6.3)
kCpdxq kdk
Rl
drkl ∀≤∑
∈
,, (6.4)
lCprxq lrl
Cn
rcln ∀≤∑
∈
,, (6.5)
jqqDk
mdjk
Si
smij ∀= ∑∑
∈∈
,,, (6.6)
kqqRl
drkl
Mj
mdjk ∀= ∑∑
∈∈
,,, (6.7)
lqqCn
rcln
Dk
drkl ∀= ∑∑
∈∈
,,, (6.8)
nDemq nRl
rcln ∀=∑
∈
,, (6.9)
NsxSi
si ≤∑
∈
(6.10)
NmxMj
mj ≤∑
∈
(6.11)
NdxDk
dk ≤∑
∈
(6.12)
NrxRl
rl ≤∑
∈
(6.13)
69
{ } { } { } { } nlkjixxxx rl
dk
mj
si ,,,,,1,0,1,0,1,0,1,0 ∀∈∈∈∈
nlkjiqqqq rcln
drkl
mdjk
smij ,,,,,0,0,0,0 ,,,, ∀≥≥≥≥
It can be seen in objective function (6.1) that different costs are weighted according
to the category they belong to ( ecw ,enw , and sow ).
The constraints from (6.2) to (6.5) represent the capacity constraints for the different
facilities. These constraints ensure that the total order quantities/allocations to meet
buyers demands should be less than the supply capacities of respective facilities at
different stages of supply chain.
Constraints (6.6) - (6.8) are the balancing constraints for material flow at different
facilities of the supply chain. These constraints imply that the quantity of inflow of
materials at any facility is equal to its outflow.
Constraint (6.9) ensures the demand satisfaction constraint for the customer. It
implies that quantity of material supplied by the retailer should satisfy the demands from
customers/final clients in the market.
Constraints from (6.10) to (6.13) restrict the number of suppliers, manufacturers,
distributors, and retailers selected in the sustainable supply chain network design to the
maximum values available.
In our model there are four binary variables ( { } lkjixxxx rl
dk
mj
si ,,,,1,0,,, ∀∈ )
related to selection of suppliers, manufacturers, distributors, and retailers at different
stages of the supply chain. Besides, the variables for order quantity allocations for
70
different facilities at various stages of the supply chain are non-negative and real in
nature, that is, nlkjiqqqq rcln
drkl
mdjk
smij ,,,,,0,,, ,,,, ≥
It can be seen from above that our problem is a linear integer programming problem.
To solve the problem, we will use the AIMMS optimization software developed by
Paragon Decision Inc. The AIMMS software has an advanced development environment
for building and experimenting optimization algorithms. The latest version 3.11 of
AIMMS has three main components (Figure 6.2) [115]:
Figure 6.2: Introduction of AIMMS Components
1) Solvers, that allow you to solve both small and large scale mathematical
programming problems, such as linear programming (LP), nonlinear
programming (NLP), and mixed integer programming (MIP).
71
2) Mathematical modeling language to build customized mathematical models
integrated with external DLLs, databases, API, and web-based applications.
3) Graphical user interface (GUIs) to help design easily understandable and
operational interfaces for mathematical models.
AIMMS has a very open and friendly on-line service for software download,
operation manual inquiry, license application, access to manuals etc. More details can be
found at AIMMS website (www.aimms.com).
6.4 Numerical Example
Let us consider a supply chain network comprising of 4-raw material supplier,
4-manufacturer, 3-distributor, 3-retailer, and 5-customer as shown in Figure 6.3. The
objective is to design a sustainable supply chain that satisfies the given customer
demands considering the economical, environmental, and social objectives.
72
Figure 6.3: The Supply Chain Network for Numerical Example
The input data on transportation costs, social costs and environmental costs for each
stage of the supply chain has been presented in Tables 6.1 – 6.4. The weights associated
with the three objectives namely Eco: Env: Soc are equal to 0.493:0.118:0.388 (obtained
from SFD). The capacities of the different facilities and the customer demands are
presented in Table 6.5.
Table 6.1: Data Input for Stage One: Supplier – Manufacturer
Transportation Costi S1 S2 S3 S4 i S1 S2 S3 S4 i S1 S2 S3 S4
i j j j
S1 49613 M1 30 21 27 16 M1 19 12 11 18 M1 28 13 26 29
S2 21127 M2 22 19 28 19 M2 28 22 22 13 M2 10 21 26 28S3 44933 M3 16 16 23 13 M3 23 30 15 25 M3 14 15 28 12
S4 45660 M4 24 14 10 24 M4 22 15 18 15 M4 13 29 15 14
Facilitiy Cost Environmental Cost Social CostStage One: Raw Material Supplier -- Manufacturer
Input Data One
73
Table 6.2: Data Input for Stage Two: Manufacture – Distributor
Transportation Costj M1 M2 M3 M4 j M1 M2 M3 M4 j M1 M2 M3 M4
j k k k
M1 46333 D1 11 26 15 12 D1 30 14 16 14 D1 12 13 30 28M2 29023 D2 20 29 19 26 D2 30 15 27 27 D2 16 27 21 29M3 41699 D3 19 22 15 17 D3 22 11 12 28 D3 27 22 19 11M4 16732
Input Data Two
Stage Two: Manufacturer -- Distribution CentorFacilitiy Cost Environmental Cost Social Cost
Table 6.3: Data Input for Stage Three: Distributor – Retailer
Transportation Costk D1 D2 D3 k D1 D2 D3 k D1 D2 D3
k l l l
D1 17624 R1 25 27 21 R1 25 13 27 R1 30 23 23
D2 10717 R2 10 14 21 R2 14 16 24 R2 22 11 20D3 49482 R3 12 17 19 R3 20 20 29 R3 19 14 21
Input Data Three
Stage Three: Distribution Centor -- Retailer
Facilitiy Cost Environmental Cost Social Cost
Table 6.4: Data Input for Stage Four: Retailer – Customer
Transportation Costl R1 R2 R3 l R1 R2 R3 l R1 R2 R3
l n n n
R1 42688 C1 28 14 14 C1 10 12 29 C1 14 14 30
R2 43094 C2 18 28 27 C2 14 22 23 C2 14 22 26R3 46456 C3 22 17 20 C3 15 14 28 C3 18 16 29
C4 16 18 21 C4 26 24 25 C4 19 24 26C5 17 11 24 C5 23 13 11 C5 26 23 22
Stage Four: Retailer -- CustomerFacilitiy Cost Environmental Cost Social Cost
Input Data Four
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Table 6.5: Facility Capacities and Customer Demands
nC1 500 i j k lC2 1200 S1 3000 M1 8000 D1 9000 R1 6000C3 2000 S2 1400 M2 5000 D2 10000 R2 3000C4 800 S3 3809 M3 2000 D3 15000 R3 5000C5 1600 S4 4000 M4 7000
Demands from CustomerRaw Material Supplier Manufacturer RetailerDistribution Center
Supply Capacity of Each Facility
The above input data and the supply chain network were fed into the AIMMS
software to run the SSCND model. Figure 6.4 demonstrates the results for our numerical
example. In the lower left corner in Figure 6.4, we find details on model type, solver, best
solution, running time etc. Other details such as variable statistics, constraint solution, etc
can also be found on the same screen.
Figure 6.4: Model results from AIMMS
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The solution details for the numerical example are presented in Figure 6.5. The
suppliers, manufacturers, distributors, retailers finally selected in the sustainable network
design have a ‘1” in the column called “value”. The order quantities allocated to them can
also be seen in the same column towards the bottom. The final solution has been
graphically represented in Figure 6.6.
Figure 6.5: Variable Values for the SSCND Numerical Example
It can be seen in Figure 6.6 that two suppliers (S3, S4), one manufacturer (M4), one
distributor (D1), and two retailers (R2, R3) are finally chosen to meet an overall customer
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demand of 6100. The numbers in dark represent the capacities of the respective facilities
whereas the numbers in light color represent the order quantities allocated to them. It can
be seen that capacities and demand constraints are respected at each stage of the supply
chain.
Figure 6.6: The Topology of SSCN for the Numerical Example
Table 6.6: Costs Distribution of SSCND for Numerical Example
×0.493 ×0.118 ×0.388
The Total Costs56582846318 198504
The Costs:
The Weight Used:
Economical Costs Environmental Costs
AIMMS Outputs
Social CostsAIMMS Optimal Results: 281046
Table 6.6 presents the results for the objective function or total costs incurred in
designing the sustainable supply chain network. The overall costs are 565828 out of
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which 281046 is attributed to Economic category, 46318 to the environmental category
and 198504 to the social category.
6.5 Scenario Analysis
To verify the model results, we conducted scenario analysis. These scenarios are
related to change in weights of socio-economic-environmental objectives, change in
supply capacities of facilities and demands of customers and change in the size of the
supply chain network. The details of the different scenarios along with the results
obtained are presented as follows:
6.5.1 Scenario 1 (Change in Weights of Objective Functions)
The first scenario addresses the change in weights of social, economic and
environmental costs used in the objective function. From SFD, we obtained the weights
0.493:0.118:0.388 for the Economic:Environmental:Social category. The different weight
categories that will be addressed in the scenario analysis are shown in Table 6.7.
Table 6.7: Weights for Scenario Analysis
Test 1 0.6 0.2 0.2Test 2 0.2 0.6 0.2Test 3 0.2 0.2 0.6Test 4 0.333 0.333 0.333
ecw enw sow
It can be seen in Table 6.7 that there are four categories of tests. In Test 1, the
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economic costs have highest weight; in Test 2 the environmental costs have the highest
weight whereas in Test 3, the social costs have highest weight. In Test 4, all the three
costs have equal weights. The results for the different tests are presented as follows:
1. Test 1 (Weight ratio 0.6:0.2:0.2 (Eco:Env:Soc)).
The outputs from AIMMS for Test 1 scenario are shown in Figure 6.7. It can be seen
that suppliers S3 and S4, manufacturer M4, distributor D1, and retailers R2 and R3 are
finally selected.
Figure 6.7: Results of Test 1, Scenario 1
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Figure 6.8: The Topology of SSCN for Test 1, Scenario 1
The results are graphically represented in Figure 6.8. The order quantity allocations
for S3 and S4 are 3809 and 2291 respectively, manufacturer M4 is 6100, distributor D1 is
6100, and retailers R2 and R3 is 3000 and 3100 respectively. It can be seen that the
capacity constraints are satisfied at all stages of the supply chain.
The total cost or objective function value for the network design represented in
Figure 6.8 is shown in Table 6.8. The economical costs are 338144, environmental
costs are 80405 and social costs are 104022 making a total cost of 522571.
Table 6.8: Costs Distribution for Test 1, Scenario 1
×0.6 ×0.2 ×0.280405AIMMS Optimal Results: 338144
AIMMS Outputs
The Costs: Economical Costs Environmental Costs Social Costs The Total Costs104022 522571
The Weight Used:
80
2. Test 2 (weight ratio 0.2:0.6:0.2 (Eco:Env:Soc)).
The outputs from AIMMS for Test 2 scenario are shown in the Figure 6.9. It can be
seen that suppliers S3 and S4, manufacturer M4, distributor D1, and retailers R2 and R3
are finally selected.
Figure 6.9: Results for Test 2, Scenario 1
The results are graphically represented in Figure 6.9. The order quantity allocations
for S3 and S4 are 3809 and 2291 respectively, manufacturer M4 is 6100, distributor D1 is
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6100, and retailers R2 and R3 is 3000 and 3100 respectively. It can be seen that the
capacity constraints are satisfied at all stages of the supply chain.
Figure 6.10: The Topology of SSCN for Test 2, Scenario 1
The total cost or objective function value for the network design represented in
Figure 6.10 is shown in Table 6.9. The economical costs are 115015, environmental costs
are 234616 and social costs are 102022 making a total cost of 451653.
Table 6.9: Costs Distribution for Test 2, Scenario 1
×0.2 ×0.6 ×0.2AIMMS Optimal Results: 115015 234616 102022 451653The Weight Used:
AIMMS Outputs
The Costs: Economical Costs Environmental Costs Social Costs The Total Costs
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3. Test 3 (Weight ratio 0.2:0.2:0.6 (Eco:Env:Soc)).
The outputs from AIMMS for the Test 3 are presented in Figure 6.11. It can be seen
that suppliers S3 and S4, manufacturer M4, distributor D3, and retailers R1 and R2 are
finally selected.
Figure 6.11: Results for Test 3, Scenario 1
The results are graphically represented in Figure 6.11. The order quantity allocations
for S3 and S4 are 3809 and 2291 respectively, manufacturer M4 is 6100, distributor D3 is
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6100, and retailers R1 and R2 is 3100 and 3000 respectively. It can be seen that the
capacity constraints are satisfied at all stages of the supply chain.
Figure 6.12: The Topology of SSCN for Test 3, Scenario 1
The total cost or objective function value for the network design represented in
Figure 6.12 is shown in Table 6.10. The economical costs are 134093, environmental
costs are 104285 and social costs are 237965 making a total cost of 476343.
Table 6.10: Costs Distribution for Test 3, Scenario 1
×0.2 ×0.2 ×0.6AIMMS Optimal Results: 134093 104285 237965 476343The Weight Used:
AIMMS Outputs
The Costs: Economical Costs Environmental Costs Social Costs The Total Costs
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Table 6.11 presents the differences in results obtained for Test 2 and Test 3. It can be
seen that the distributors and retailers differ across the two scenarios whereas the
manufacturers and the suppliers remain the same.
Table 6.11: Order Allocation and SSCND for Test 2 and Test 3, Scenario 1
Supplier Buyer Quantity Supplier Buyer Quantity Supplier Buyer Quantity Supplier Buyer Quantity
Test 2: S3 M4 3809 M4 D1 6100 D1 R2 3000 R2 C1 500S4 M4 2291 D1 R3 3100 R2 C3 2000
R2 C4 500
R3 C2 1200R3 C4 300R3 C5 1600
Test 3: S3 M4 3809 M4 D3 6100 D3 R1 3100 R1 C1 500
S4 M4 2291 D3 R2 3000 R1 C2 1200R1 C3 600
R1 C4 800
R2 C3 1400R2 C5 1600
Stage One Stage Two Stage Three Stage Four
4. Test 4 (Weight ratio 0.333:0.333:0.333 (Eco:Env:Soc)).
In this scenario weight of economical costs, environmental costs, and social costs are
the same (=0.333). The outputs from AIMMS for scenario Test 4 are presented in Figure
6.13. It can be seen that suppliers S3 and S4, manufacturer M4, distributor D1, and
retailers R2 and R3 are finally selected.
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Figure 6.13: Results of the SSCND for Test 4, Scenario 1
The results are graphically represented in Figure 6.14. The order quantity allocations
for S3 and S4 are 3809 and 2291 respectively, manufacturer M4 is 6100, distributor D1is
6100, and retailers R2 and R3 is 3000 and 3100 respectively. It can be seen that the
capacity constraints are satisfied at all stages of the supply chain.
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Figure 6.14: The Topology of SSCN for Test 4, Scenario 1
The total cost or objective function value for the network design represented in
Figure 6.14 is shown in Table 6.12. The economical costs are 1898343, environmental
costs are 130711 and social costs are 170366 making a total cost of 490912.
Table 6.12: Costs Distribution for Test 4, Scenario 1
×0.2 ×0.2 ×0.6AIMMS Optimal Results: 189834 130711 170366 490912The Weight Used:
AIMMS Outputs
The Costs: Economical Costs Environmental Costs Social Costs The Total Costs
87
6.5.2 Scenario 2 (Change in Supply Capacities and Customer Demands)
Firstly, we will consider the case of change in facility capacities on network design
(Test 1). Secondly, we will consider the case of change in customer demands on network
design (Test 2). Table 6.13 presents the new supply capacity of each facility. It is different
from the one shown in Table 6.5.
Table 6.13: New Capacities for supply chain facilities
i j k l
S1 2189 M1 2400 D1 4200 R1 3250
S2 798 M2 4800 D2 5689 R2 2890
S3 1657 M3 3780 D3 7650 R3 4876S4 3800 M4 7000
Supply Capacity of Each FacilityRaw Material Supplier Manufacturer Distribution Center Retailer
Figure 6.15 shows the results calculated by AIMMS under the new capacities of the
facilities. It can be seen that suppliers S2, S3 and S4, manufacturers M3 and M4,
distributor D1 and D2, and retailers R2 and R3 are finally selected.
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Figure 6.15: Outputs for Test 1, Scenario 2
The results are graphically represented in Figure 6.16. The order quantity allocations
for S2, S3 and S4 are 643, 1657 and 3800 respectively, manufacturers M3 and M4 is
3780 and 2320, distributors D1 and D2 is 3210 and 2890, and retailers R2 and R3 is 2890
and 3210 respectively. It can be seen that the capacity constraints are satisfied at all
stages of the supply chain.
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Figure 6.16: The Topology of SSCN for Test 1, Scenario 2
The total cost or objective function value for the network design represented in
Figure 6.15 is shown in Table 6.14. The economical costs are 326289, environmental
costs are 55394 and social costs are 178814 making a total cost of 560498.
Table 6.14: Costs Distribution for Test 1, Scenario 2
×0.493 ×0.118 ×0.388AIMMS Optimal Results: 326289 55394 178814 560498The Weight Used:
AIMMS Outputs
The Costs: Economical Costs Environmental Costs Social Costs The Total Costs
Now, we will consider the case of change in customer demands on network design
(Test 2). Table 6.15 presents the new set of customer demands. Figure 6.17 and Figure
6.18 show the outputs and the topology of SSCN.
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Table 6.15: Varying the Demand Data with the Numerical Example to Test the Model
n
C1 400C2 850
C3 1680
C4 2500
C5 1980
Demands from Customer
Figure 6.17: Outputs for Test 2, Scenario 2
91
Figure 6.17 shows the results calculated by AIMMS under the new customer
demands. It can be seen that suppliers S1, S3 and S4, manufacturers M3 and M4,
distributor D1 and D2, and retailers R2 and R3 are finally selected. The results are
graphically represented in Figure 6.18. The order quantity allocations for S1, S3 and S4
are 1953, 1657 and 20 respectively to manufacture M4. The raw material supplier S4
supplies 3780 units of product to M3. In second stage, manufacturer M3 supplies 570 to
D1 and 3210 for D2. Manufacturer M4 supplies 3630 to distributor D1. Distributors D1
and D2 allocate total 4520 to retailer R3, and D2 supplies 2890 to R2. It can be seen that
the capacity constraints are satisfied at all stages of the supply chain.
Figure 6.18: The Topology of SSCN for Test 2, Scenario 2
The total cost or objective function value for the network design represented in
Figure 6.18 is shown in Table 6.16. The economical costs are 387296, environmental
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costs are 68984 and social costs are 218077 making a total cost of 674357.
Table 6.16: Costs Distribution for Test 2, Scenario2
×0.493 ×0.118 ×0.388The Weight Used:
AIMMS Outputs
The Costs: Economical Costs Environmental Costs Social Costs The Total CostsAIMMS Optimal Results: 387296 68984 218077 674357
Based on the results of these two scenarios, we can say that the network design and
associated order quantity allocations are different whenever a change in capacity or
demand occurs.
6.5.3 Scenario 3 (Change in Size of the Supply Chain Network)
Table 6.17: Model results for Test 1-5, Scenario 3
Test 1 (Remove S3, S4)
Test 2(Remove M3, M4)
Test 3(Remove D2, D3)
Test 4(Remove R1, R2)
Test 5(Remove C1, C2)
CustomerRetailerDistributorManufacturerSupplier
382903 0.02s
Time to getthe results
Total CostNetwork Design
4 4 3 3 3 S2,S3,M4,D1,R2,R3
525868 0.02s
4 4 3 1 5 Infeasible N/A -
4 4 1 3 5 S3,S4,M4,D1,R2,R3
N/A -
4 2 3 3 5 S2,S3,S4,M1,D1,R2,R3 554756 0.02s
2 4 3 3 5 Infeasible
Table 6.17 shows the details of the different network sizes used for testing in
scenario 4. The different network sizes are obtained by changing the number of suppliers,
manufacturers, distributors, retailers, customers etc. A total of five scenarios are
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considered. The results generated from AIMMS for each of the test scenario is presented
in last three columns of Table 6.17.
It can be seen from results of Table 6.17 that the network design becomes infeasible
whenever demand and capacity constraints are violated (Test 1 and Test 4). For Test 2 and
Test 5, we observe a change in the network design and associated costs when compared
to original network design (Figure 6.6). For Test 3, the network design remains same as
in Figure 6.6; however, the total costs are different. Therefore, based on the results of
scenario “change in network size”, we can verify the correctness of results of our model
and sensitivity to input parameters in designing sustainable supply chain networks.
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Chapter 7
7 Conclusions and Future Work
7.1 Summary
In this thesis, we propose a mathematical programming based modeling framework
for designing sustainable supply chain networks considering the economical,
environmental and social objectives. Applying the method of systematical literature
review, the research collects and analyzes the state-and-the-art publications about green
supply chain management and sustainable supply chain management to investigate the
definitions, applications, research methods, drivers and barriers about GSCM and SSCM.
It was found during the literature study that most of the models on sustainable supply
chains are more concerned with minimizing the costs for economical and environmental
side, and social requirements are rarely integrated in the SSCND models. Considering the
shortage of studies in this direction, we pursued the goal of developing a modeling
framework for sustainable supply chain design considering the three dimension of
“sustainability” namely social, economic and environmental.
The proposed framework comprises of three steps. In the first step, we identify the
customer requirements (also called listening to Voice of the Customer (VOC)), technical
requirements, and metrics for measuring the performance of sustainable supply chains
95
using Systematic Literature Review and Questionnaire Surveys C-REQ and T-REQ. In
the second step, we investigate the customer requirements and technical requirements,
study their relationship and allocate weights using Priority Matrix and Sustainable
Function Deployment (SFD). In the third and the last step, we develop an integer
programming model for designing sustainable supply chain network in AIMMS using the
weighted technical requirements and network modeling parameters.
7.2 SWOT Analysis
Figure 7.1 presents a SWOT (Strengths, Weaknesses, Opportunities and Threats)
analysis of the research work pursued in this thesis.
Figure 7.1: Thesis SWOT Analysis
The strengths of our work are the novelty of approaches used in SSCND. In our
knowledge, this is the first work that integrates a multitude of techniques such as
96
Systematic literature review, C-REQ and T-REQ surveys, Priority Analysis, Sustainable
Functional Deployment, and Mathematical programming based model for SSCND. The
weakness of our model is lack of real data, limited number of participants, lack of focus
on a specific supply chain sector, and consideration of only limited number of variables
extracted from systematic literature review. These weaknesses open opportunities for
improvement in these areas in future and integration of new features such as operational
level planning, software development, and practical application under realistic test
scenarios. The threats to our model are existence of other model categories, other
mathematical models, and inclusion of more modeling variables; however, they are not
yet many in number.
7.3 The Future Research
From the SWOT analysis, many opportunities emerge that can be pursued as future
works in the field of sustainable supply chain network design. First, application of the
proposed SSCND model on practical problems can be done and results be verified and
validated under real conditions. Secondly, integration of more operational details,
allocation of different weights for socio-economic-environmental dimensions at various
stages of the supply chain, survey studies with increased number of participants can be
done. Last but not the least, the proposed modeling framework can be used to develop an
integrated modeling software for decision makers at strategic levels in supply chains for
designing sustainable supply chain networks. Therefore, as future works, efforts can be
97
directed towards planning and execution of the proposed research activities for
developing sustainable supply chain networks.
98
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Appendix A
Customer Requirements Survey for Sustainable Supply Chain
Management (C-REQ)
This questionnaire intends to collect the customer requirements for sustainable supply chain management.
Questions can have multiple answers. Please feel free to ask surveyor(s) if you need more information
about anything on the questions.
1. Please indicate your status?
□ Student □ Faculty □ Researcher □ Full time worker
2. Please indicate your managerial position if you are a full time employee?
□ Junior manager □ Team leader □ Project manager □ Senior manager □ VIP □ CEO
3. Which stage of supply chain are you associated with?
□ Material Supply □ Manufacturing/Production □ Distribution/Logistics
□ Whole Seller/Retail □ Customer Service/Marketing
4. Which category of “Customer” you belong to?
□ Clients of business □ Clients of products/services □ Internal employees
□ Business partners □ All the stakeholders related your work or business
5. What should be included in “Performance” based on your work or business?
□ Clients satisfy the products/services □ Stakeholders satisfy processes/results of work/business
□ Employees satisfy the benefits □ Employees satisfy the work environment
6. Do you have customers in your work? How do they feel about your products/services?
□ No
□ Yes
□ No feedbacks □ More complaints □ Satisfied □ Good comments
7. Does satisfaction of customer requirements impacts your work performance?
□ No impact □ Somewhat impact □ Impact □ Remarkable impact
8. Do you think that all customer requirements should be satisfied and best fulfilled at the same time?
□ All should be considered at same time □ All should be considered but not the same time
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□ Not all to be considered at same time □ Not all to be considered and not the same time
9. Do you think it is feasible and valuable to respond to every customer requirement with your efforts?
□ Not feasible but valuable □ Feasible but not valuable
□ Feasible and valuable □ Not feasible and also Not valuable
10. Please mark the most important factors related to the performance of your work/business. In addition,
please indicate the level to each factor based on their influence on the total performance of your
work/business, and how much efforts should be devoted to accomplish them.
Impact on Total Performance Effort to be Devoted
□ High employee benefits 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Consumer safety 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Competitive advantage 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Best returns on investing 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Efficient communication 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Consumer health 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good to be a leader 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good in public benefits 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Effective work processes 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Compliance in product 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good for globalization 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Legislation compliance 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Human rights protection 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Best in service 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good for collaboration 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good in public safety 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Least work pressures 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Least costs on product 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Least operation costs 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good for public health 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Safe in work environment 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good for social diversity 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
Thank you for your time and responses.
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Appendix B
Technical Requirements Survey for Sustainable Supply Chain
Management (T-REQ)
The purpose of this survey is to collect the responses from managerial and technical people on most
important technical requirements for sustainable supply chain management (SSCM), the relationships
between customer requirements and technical requirements, and assessing correlation between them.
Please feel free to ask surveyor(s) if you need more information about anything on the questions.
1. Please indicate your professional level?
□ Supply chain manager □ Senior manager in a supply chain □ Researcher in supply chains
2. Which stage are you involved in the supply chain?
□ Material Supply □ Manufacturing/Production □ Distribution/Logistics
□ Whole Seller/Retail □ Customer Service/Marketing
3. Please mark your expectations and perceptions for the following technical requirements associated
with sustainable supply chain management.
DEFINITIONS:
Technical Requirements: stands for what kind of methods/activities should be conducted to
satisfy the customer requirements in order to improve the performance of
SSCM.
Customer Requirements: stand for what kind of results or characteristics should be achieved in order
to fulfill the customer needs and improve the performance of SSCM.
Expectation Degree: stands for your expectations for a relevant technical requirement
in improving the performance of SSCM.
Perception Degree: stands for a judgment based on your personal experiences about a relevant
technical requirement on improving the performance of SSCM.
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Technical Requirements Influencing on the Performance of SSCM
Technical Requirements Expectation Degree Perception Degree
□ Costs and expenses control 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
Reach the high business profitability□ 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
Widely apply □ new technology and integrated systems 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Efficient business process management, activity operations 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Apply the optimization techniques or methodologies in SCs 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Collaborative operations among facilities in SCs 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Good environment operation, such as pollution prevention 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High efforts □ in utilizing natural resources, such as mining 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High efforts □ in conserving natural resources 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Efforts in natural resource regeneration, such as reuse 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Effective energy utilization, such as use fossil/bio‐energy 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Efforts in planning and conducting environment policy 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High compliance in environment legislations□ 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High satisfaction □ of customers and business partners in SCs 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High efforts to manage business trust and reputation□ 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High □ efforts in the social equity, such as salary, work load 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High efforts □ in public benefits, such as training, welfare 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High efforts □ in culture protection, such as respect habits 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
High□ efforts in business ethics and moral attempts 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ Natural environment decides the performance of SSCM 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ The politics satisfaction decides the performance of SSCM 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
□ The religion situation decides the performance of SSCM 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
4. Please to indicate the relationships between the technical requirements?
SYMBOL:
• means there is a strong positive relationships between those two technical requirements
ο means there is an obvious positive relationships between those two technical requirements
Δ means there is a weak positive relationships between those two technical requirements
× means there is a weak negative relationships between those two technical requirements
⌧ means there is an obvious negative relationships between those two technical requirements
means there is a strong negative relationships between those two technical requirements
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5. Please indicate the relationships between the customer requirements and the technical requirements.
SYMBOL:
• means there is a strong association between the customer and technical requirements
ο means there is a somewhat association between the customer and technical requirements
Δ means there is a weak association between the customer and technical requirements
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Thank you for your time and responses.